External aid behavior in the recipient economy: A probit regression for Africa

Abstract

Aim/purpose – External aid allocation by the donors in recent years has been fraught with instability and volatility. This has a negative consequence on the recipient economies particularly those that are highly aid-dependent. A good solution to the problem requires much understanding of factors influencing the behavior of external aid in the respective recipient economy. In this study, the focus was on analyzing two economic factors uncommonly discussed in the empirical literature – the influence of the degree of economic freedom and external debt burden on aid allocation, with emphasis on African economy.

Keywords

• external aid
• economic freedom
• external debt burden
• probit regression
• f34
• f35
• c01
• e02