Aid, Domestic Governance, and Agricultural Growth in Developing Countries

Ferguson Korbla GidigloFrancis Yao SrofenyohKofi Aaron Aboa-Offei Agyei-HenakuCharlotte Badu-PrahAkua Agyeiwaa-AfraneJustice Gameli Djokoto

DOI 10.7160/aol.2024.160104
No 1/2024, March
pp. 35-47

Gidiglo, F. K., Srofenyoh, F. Y., Agyei-Henaku, K. A. A.-O., Badu-Prah, Ch., Agyeiwaa-Afrane, A. and Djokoto, J. G. (2024) "Aid, Domestic Governance, and Agricultural Growth in Developing Countries", AGRIS on-line Papers in Economics and Informatics, Vol. 16, No. 1, pp. 35-47. ISSN 1804-1930. DOI 10.7160/aol.2024.160104.

Abstract

This study departed from other agricultural aid-growth studies by measuring growth as the annual growth rate of agricultural value added and accounting for the moderating role of governance on the aid-growth effect. Using data on a panel of 117 developing countries from 1996 to 2020, aid negatively influenced agricultural growth. Governance had a negative but insignificant independent effect on growth. However, the interaction of governance with aid turned the aid-growth effect from a significant negative to a statistically insignificantly positive effect. Since the low level of governance produced the positive interaction effect, of the aid-growth relationship, escalation of (good) governance could produce a strong effect.

Keywords

Agricultural aid, agricultural growth, aid-effectiveness, developing countries, governance.

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