Uganda has always relied on foreign assistance to enhance its economic development and has been a recipient of foreign assistance from individual countries and from multilateral organizations. The study aims at establishing the effects of foreign aid on the economic growth of Uganda. It used annual time series data for the period 1970-2017. The hypothesis that foreign aid can promote growth was explored. This hypothesis was tested using time series data for foreign aid. An empirical model is estimated using the Autoregressive Distributed Lag (ARDL) approach to cointegration proposed by Pesaran and Shin [59]. Results show that foreign aid inflow significantly reduced economic growth in Uganda in the short run and long run. The domestic investment was significant and had a positive sign in the short run while exports increased output in the short and long run. Dummy variable for insecurity increase output in the short run and increased it in the long run. The study identified previous periods of democracy index and effective labor to have negatively affected output in the short run. In the long run, effective Labour force, exports, Dummy variable for insecurity and democratic index was found to increase output in the long run. This study contributes to the literature on foreign aid and economic growth by providing the theoretical and empirical evidence for Uganda.
| Published in | International Journal of Sustainability Management and Information Technologies (Volume 6, Issue 2) |
| DOI | 10.11648/j.ijsmit.20200602.11 |
| Page(s) | 36-49 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2020. Published by Science Publishing Group |
Foreign Aid, Economic Growth, Autoregressive Distributed Lag Modelling
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APA Style
Ssemanda Patrick Edward, Henry Tumwebaze Karamuriro. (2020). Effects of Foreign Aid Inflow on Economic Growth of Uganda: Autoregressive Distributed Lag Modelling (ARDL). International Journal of Sustainability Management and Information Technologies, 6(2), 36-49. https://doi.org/10.11648/j.ijsmit.20200602.11
ACS Style
Ssemanda Patrick Edward; Henry Tumwebaze Karamuriro. Effects of Foreign Aid Inflow on Economic Growth of Uganda: Autoregressive Distributed Lag Modelling (ARDL). Int. J. Sustain. Manag. Inf. Technol. 2020, 6(2), 36-49. doi: 10.11648/j.ijsmit.20200602.11
AMA Style
Ssemanda Patrick Edward, Henry Tumwebaze Karamuriro. Effects of Foreign Aid Inflow on Economic Growth of Uganda: Autoregressive Distributed Lag Modelling (ARDL). Int J Sustain Manag Inf Technol. 2020;6(2):36-49. doi: 10.11648/j.ijsmit.20200602.11
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Download@article{10.11648/j.ijsmit.20200602.11,
author = {Ssemanda Patrick Edward and Henry Tumwebaze Karamuriro},
title = {Effects of Foreign Aid Inflow on Economic Growth of Uganda: Autoregressive Distributed Lag Modelling (ARDL)},
journal = {International Journal of Sustainability Management and Information Technologies},
volume = {6},
number = {2},
pages = {36-49},
doi = {10.11648/j.ijsmit.20200602.11},
url = {https://doi.org/10.11648/j.ijsmit.20200602.11},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijsmit.20200602.11},
abstract = {Uganda has always relied on foreign assistance to enhance its economic development and has been a recipient of foreign assistance from individual countries and from multilateral organizations. The study aims at establishing the effects of foreign aid on the economic growth of Uganda. It used annual time series data for the period 1970-2017. The hypothesis that foreign aid can promote growth was explored. This hypothesis was tested using time series data for foreign aid. An empirical model is estimated using the Autoregressive Distributed Lag (ARDL) approach to cointegration proposed by Pesaran and Shin [59]. Results show that foreign aid inflow significantly reduced economic growth in Uganda in the short run and long run. The domestic investment was significant and had a positive sign in the short run while exports increased output in the short and long run. Dummy variable for insecurity increase output in the short run and increased it in the long run. The study identified previous periods of democracy index and effective labor to have negatively affected output in the short run. In the long run, effective Labour force, exports, Dummy variable for insecurity and democratic index was found to increase output in the long run. This study contributes to the literature on foreign aid and economic growth by providing the theoretical and empirical evidence for Uganda.},
year = {2020}
}
TY - JOUR T1 - Effects of Foreign Aid Inflow on Economic Growth of Uganda: Autoregressive Distributed Lag Modelling (ARDL) AU - Ssemanda Patrick Edward AU - Henry Tumwebaze Karamuriro Y1 - 2020/08/27 PY - 2020 N1 - https://doi.org/10.11648/j.ijsmit.20200602.11 DO - 10.11648/j.ijsmit.20200602.11 T2 - International Journal of Sustainability Management and Information Technologies JF - International Journal of Sustainability Management and Information Technologies JO - International Journal of Sustainability Management and Information Technologies SP - 36 EP - 49 PB - Science Publishing Group SN - 2575-5110 UR - https://doi.org/10.11648/j.ijsmit.20200602.11 AB - Uganda has always relied on foreign assistance to enhance its economic development and has been a recipient of foreign assistance from individual countries and from multilateral organizations. The study aims at establishing the effects of foreign aid on the economic growth of Uganda. It used annual time series data for the period 1970-2017. The hypothesis that foreign aid can promote growth was explored. This hypothesis was tested using time series data for foreign aid. An empirical model is estimated using the Autoregressive Distributed Lag (ARDL) approach to cointegration proposed by Pesaran and Shin [59]. Results show that foreign aid inflow significantly reduced economic growth in Uganda in the short run and long run. The domestic investment was significant and had a positive sign in the short run while exports increased output in the short and long run. Dummy variable for insecurity increase output in the short run and increased it in the long run. The study identified previous periods of democracy index and effective labor to have negatively affected output in the short run. In the long run, effective Labour force, exports, Dummy variable for insecurity and democratic index was found to increase output in the long run. This study contributes to the literature on foreign aid and economic growth by providing the theoretical and empirical evidence for Uganda. VL - 6 IS - 2 ER -
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