Does Foreign Aid In Education Promote Economic Growth? Evidence From Sub-Saharan Africa

Abstract

This paper examines whether foreign aid in education has a significant effect on growth in Sub-Saharan Africa. Our analysis covers 38 countries over the period 1990–2004 and we control for initial per capita income, inflation, investment, government consumption, openness to trade and institutional quality. We find that (i) aid in primary education has a positive and significant effect on growth; (ii) aid in post-primary education has an adverse effect or at best no significant impact on growth; and (iii) growth increases as aid in primary education as a share of total education aid rises.