Aid and the African Dilemma: The Effect of Foreign Aid on Human Development in Africa

Abstract

This paper contributes to the long line of aid effectiveness literature by looking at the impact of aid on human development in Africa. Using time series data on 34 African countries from 1960-2005 and infant mortality as a measure for human development, this paper assesses the direct effect of foreign aid on infant mortality and the indirect effects through the core determinants of infant mortality. The empirical findings of this study yield inconclusive results regarding the impact of foreign aid on infant mortality both directly and indirectly through the core determinants. However, this study reinforces the problem with data quality and availability in respect to Africa. Investment in quality data collection and availability in Africa should be a major priority for donors and aid recipient countries in order to better measure the impact of aid on human development outcomes.