- Research Article
- 10.30560/hssr.v9n3p1
Foreign Aid, Corruption Control, and Inequality in Sub-Saharan Africa: Evidence from a Dynamic OLS Panel Model
- Mar 20, 2026
- Humanities and Social Science Research
- Kamal Tasiu Abdullahi + 2 more +2
This study examines the long-run relationship between foreign aid, poverty, and income inequality in 27 least developed countries across Sub-Saharan Africa (SSA), South Asia, East Asia, Western Asia, and Latin America over the period 1990–2011. Using an unbalanced panel dataset, the study applies the Dynamic Ordinary Least Squares (DOLS) estimator to account for potential endogeneity and serial correlation in the presence of integrated variables. Panel unit root and cointegration tests are conducted prior to estimation. The study findings indicate that foreign aid has a statistically significant effect on poverty and inequality; however, its redistributive impact is conditional on the quality of governance. Specifically, in Sub-Saharan African countries with weak corruption control, the effect of aid on inequality is minimal. Conversely, when governance quality improves, foreign aid exhibits a stronger equalizing effect. These findings suggest that the effectiveness of aid in reducing poverty and inequality depends critically on institutional quality and anti-corruption mechanisms. The study highlights the importance of strengthening governance frameworks to enhance the developmental impact of foreign assistance.
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