Official development assistance and inclusive growth in WAEMU
The role of institutional quality
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With the goal of reducing inequality and poverty in the context of high economic growth in developing countries, the quest for inclusive growth has become a dominant paradigm. The literature indicates that a country's governance can influence the success rate of aid in improving people's well-being. Therefore, this study examines the effects of governance on the attractiveness of aid in WAEMU countries and beyond, and determines the role of institutions in the relationship between aid and the inclusiveness of their economic growth over the period 1999 - 2016. Based on the Pool Mean Group (PMG)...
With the goal of reducing inequality and poverty in the context of high economic growth in developing countries, the quest for inclusive growth has become a dominant paradigm. The literature indicates that a country's governance can influence the success rate of aid in improving people's well-being. Therefore, this study examines the effects of governance on the attractiveness of aid in WAEMU countries and beyond, and determines the role of institutions in the relationship between aid and the inclusiveness of their economic growth over the period 1999 - 2016. Based on the Pool Mean Group (PMG) and Mean Group (MG) methods in panel data, the study shows that governance is a factor in the attractiveness of development aid. Moreover, if governments take appropriate policy measures to improve their institutions, the perverse effect of foreign aid on growth can be mitigated, thereby contributing to equity and improved living conditions for WAEMU populations.
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