The link between sources of public spending and growth in sub-Saharan Africa
The purpose of this investigation is twofold. First, I study the effect of the sources of public spending on its level. I argue that any impact on public spending from any of its sources (including foreign aid) should be carried over to GDP per capita growth. Of the three sources of public spending (namely central government revenue, foreign aid and external debt), this study finds central government revenue to have the most significant impact on public spending levels. ... Second, the study analyses the link between sources of public spending and growth. After correcting for the potential endogeneity of aid, there is strong evidence to suggest that Sub-Saharan African countries have benefited significantly from the decades of development assistance.
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