Effectiveness of Bilateral and Multilateral Official Development Assistance on Economic Growth in CEMAC: An Expansion Variable Analysis Method

摘要

This study investigates the effectiveness of aid in Economicand Monetary Community of Central Africa (CEMAC) from 1978 to 2010. We use paneldata model and the decomposition of Casetti and Jones to test the linkages betweenbilateral and multilateral Official Development Assistance (ODA) and economic growth.Four main conclusions were drawn: Firstly, the most prominent positive effects comefrom the interaction of aid and Foreign Direct Investment. Thus, the interactionof aid and FDI plays a significantly positive role in economic growth in CEMAC.This result assumes a form of complementarity between FDI and ODA flows in the subregion.Secondly, of the four external sources of financingof the economy, Foreign Direct Investment (FDI) does not play a positiverole in the growth in CEMAC. Thirdly, Economic growth in the sub-region seems tobe more dependent on savings and the trade balance. Fourtly, according to originof aid, multilateral aid as well as aid from the Development Assistance Committee(DAC) or Emerging Countries explains economic growth in CEMAC but its direct effecton it is negative. We find that of the three aid packages, DAC, emerging or multilateral,the DAC subsidies contribute the least negatively to growth. Public aid explainseconomic growth in CEMAC, but its effect on economic growth is negative; a 1% increasein ODA would lead to a 3% drop in growth.