Financing Inclusive Development Through Aid and FDI: The Empirical Case of WAMZ
Journal of World Economic Research
Volume 5, Issue 5, October 2016, Pages: 43-58
Received: Jul. 17, 2016; Accepted: Aug. 9, 2016; Published: Sep. 7, 2016
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Okon Umoh, Department of Economics, Faculty of Social Sciences, University of Uyo, Uyo, Nigeria;West African Institute for Financial and Economic Management, WAIFEM, Lagos, Nigeria
Kenneth Onye, Department of Economics, Faculty of Social Sciences, University of Uyo, Uyo, Nigeria
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West African countries are caught in a structural Poverty trap due to severe underdevelopment of their productive forces, compounded by an unfavorable international environment and lack of genuine commitment on the part of affluent countries to assist them. Despite rising income among these countries, inequality and poverty incidence seems to be rising. Of course, they could be greatly assisted through effective international actions. This paper investigates the contributions of FDI and aid in accelerating the development of WAMZ member countries. The paper relies on both the Fixed Effect and Dynamic Arellano-Bond GMM Panel Data regression frameworks to show that aid contributes powerfully to both human development and economic growth while FDI, at best, has no effect on economic growth and actually slows the rate of human development in WAMZ. The higher the level of human capital in a country, the more aid contributes to growth and development. On the basis of our findings, WAMZ require aid for inclusive development but not necessarily FDI.
Inclusive Development, Aid, FDI, WAMZ, A-B Dynamic Panel Data
To cite this article
Okon Umoh, Kenneth Onye, Financing Inclusive Development Through Aid and FDI: The Empirical Case of WAMZ, Journal of World Economic Research. Vol. 5, No. 5, 2016, pp. 43-58. doi: 10.11648/j.jwer.20160505.11
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