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Exploring the effect of ODA on poverty: insights from least developed countries

Narayan, Diviya and Singh, Baljeet (2024) Exploring the effect of ODA on poverty: insights from least developed countries. International Journal of Social Economics, NA (NA). NA-NA. ISSN 0306-8293

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Abstract

The purpose of this study is to examine the long run impact of Official Development Assistance (ODA) on Poverty levels in a sample of 33 Least Developed Countries (LDCs) from 1991-2018.
This study employed second generation panel econometric techniques like Westerlund (2007), Pedroni (2004) cointegration tests and the AMG (Eberhardt and Bond, 2009); (Eberhardt and Teal, 2010) and FMOLS (Phillips and Hansen ,1990) estimations to ascertain long run nexus between the variables of interest.
Our findings revealed that ODA has a significant and positive impact on poverty expansion in LDCs. This indicates that ODA perpetuates poverty in LDCs in the long run. While GDP per capita and trade openness significantly contributed to reducing poverty levels. Our findings have several policy implications.
This paper sheds light on panel of LDCs on which research on ODA-Poverty nexus is sparse in prevailing literature. Although studies have documented the impact on single country episodes on LDCs, research on panel of LDCs remains largely unexplored. This is surprising given the heightened economic and social issues faced by these cross sections. Additionally, a sustained downturn in ODA flows to LDCs and the commitment to meet SDG Goal 1 underscores the need for comprehensive analysis on LDCs. Hence, our study aims to address the critical gap in the prevailing literature and contribute to the field.

Item Type: Journal Article
Subjects: H Social Sciences > HB Economic Theory
Divisions: School of Accounting, Finance and Economics (SAFE)
Depositing User: Diviya Narayan
Date Deposited: 27 Jan 2025 03:20
Last Modified: 27 Jan 2025 03:20
URI: https://repository.usp.ac.fj/id/eprint/14663

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