Agricultural Foreign Aid Allocation in Sub-Saharan Africa: The importance of Democracy and Quality of Governance.

International Journal of Research and Innovation in Social Science (IJRISS) | Volume VI, Issue III, March 2022 | ISSN 2454–6186

Agricultural Foreign Aid Allocation in Sub-Saharan Africa: The importance of Democracy and Quality of Governance.

Mfouapon Alassa¹, Kamdem Cyrille Bergaly², Mohammadou Nourou³,
¹Ph.D Student, Faculty of Economics and Management, University of Maroua, Cameroon
²Associate Professor, Faculty of Economics and Management, University of Yaounde-II, Soa, Cameroon
³Professor, Faculty of Economics and Management, University of Ngaoundere, Cameroon

Abstract: The objective of this research is to revisit the determinants of the allocation of foreign aid to agriculture in Sub-Saharan Africa, with a particular focus on the effects of democracy and quality of governance. The data for the study cover the period 1996-2018 in 47 Sub-Saharan African countries. Since democracy and quality of governance are a complex and multidimensional concepts, we measure them using three variables for democracy and five variables for quality of governance. In the quantitative analyses, we perform two estimations: country fixed effects and feasible generalized least squares regressions. We find that the strength of democratic institutions and government voice and accountability positively determine foreign aid to agriculture. Moreover, the quality of governance affects the allocation of foreign aid. Indeed, political stability and absence of violence/terrorism, government effectiveness, regulatory quality, rule of law, and control of corruption positively determine the allocation of foreign aid to agriculture. Our findings have strong policy implication for Sub-Saharan Africa countries, which shows that it is more desirable to promote good governance and improving the processes of democratization in each country to shift agricultural aid flows from international aid agencies and donor’s countries.

Keywords: Agriculture, foreign aid, democracy, quality of governance.

1. Introduction

The probable consequences of the issues surrounding the agricultural question in globalization (agricultural model and ecological peril, food security and demographic change, food quality and industrialization, inequality, liberalization, etc.) as well as the fact that agriculture has been profoundly transformed by industrialization and the capitalist world-economy have placed agriculture high on the international agenda since the millennium (Mègnon, 2017). In the light of the Doha Round of trade negotiations, the agricultural issue will therefore be posed as the first materialization of agriculture in the international agenda, giving furthermore the importance of agriculture beyond even the borders. Since then, agriculture has been part of the global agendas designed at the level of the United Nations and its agencies. According to the UN 2030 Agenda (UN, 2015), the goal is “to eradicate hunger and ensure that everyone, especially the poor and vulnerable, including infants, has access to sufficient, safe and nutritious food throughout the year by 2030”.
Despite the recognition of the importance of agricultural development, foreign aid agencies have sharply reduced their allocations to the agricultural sector. In Sub-Saharan Africa, where aid is most needed, the share allocated to agriculture declined by more than half between 1980 and 2002. Moreover, this decline is not related to declining agricultural populations: per capita agricultural aid fell from a peak of about US$20 per capita in the mid-1980s to only US$7 per capita in 2001. These trends have been accompanied by a sharp decline in agricultural R&D efforts, particularly in Sub-Saharan Africa (Beintema & Stads, 2006; Pardey et al., 2006). However, there has been a relative improvement (a 2.3 point increase) in the allocation of specific foreign aid to the agricultural sector in Sub-Saharan Africa between 2002 and 2010. However, the share allocated to agriculture remained between 6.5 and 7.8 percent of the total, almost double the proportion of aid to agriculture for all developing regions (Mellor, 2017).

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