Foreign aid, human capital development and economic growth in Ghana.
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Date
2018-03
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KNUST
Abstract
The main purpose of this study was to examine foreign aid, human capitaldevelopment and economic growth in Ghana using a time series data for the period of 1975 to 2014. The study looked at the real impact of aid on human capital development and its consequence effect on economic growth in Ghana. Growth should comprise a sustained increase in both physical and human capital development. Even the growth of physical capital should impact positively on the human capital and hence economic growth. The ARDL technique was employed to examine the possibility of long run and short run effects among the variables. The Granger causality test was also used to investigate if there is any causal relationship between foreign aid on human capital development and economic growth. The statistical results obtained revealed that foreign aid had a positive and significant effect on human capital development both in the long run and short run respectively. The Granger causality test result showed that there is causality between human capital development and economic growth and also there is no causality between human
capital development and foreign aid. The study recommends that the efforts of Ghana and its donor partners will coordinate better and properly plan their efforts to undertake projects that will have positive impacts in the long run on growth in Ghana. Those projects should include public capital which will help educate and increase productivity of large group of people and their private capital. The government should create a strong absorptive capacity in terms of complete recognized framework and stable macroeconomic environment that will help the country maximize the benefits of foreign aid, and then the objectives of their multi-donor budgetary support could be very well achieved.
Description
A thesis Submitted In Partial Fulfillment Of The Requirement For The Award Of Master Of Science In Economics.