本文是一篇经济论文，这项研究主要着眼于外国援助对喀麦隆经济增长的影响。通过背景研究，本文仔细、系统地考察了外援对任何国家经济增长的影响。使用向量自回归（VAR）模型。回顾现有文献，发现喀麦隆存在方法上的差距，因此作者试图用本文填补这一差距。该研究采用两缺口模型来回答研究问题：外援对喀麦隆经济增长的影响是什么。方法论方法运用了计量经济学；1970-2019年时间序列数据的平稳性检验、Johansen协整检验、VAR模型和VECM。
CHAPTER ONE INTRODUCTION
1.1 Background of the study
Foreign aid, economic growth and economic development are burning issues confronting development economists and researchers today. The idea of foreign aid was established following the outbreak of the Great depression and the Second World War in the 1930’s. The largest aid package in history, The Marshal Plan’’ was received by the Western European countries during this time, which helped them to reconstruct their post economies after the Second World War (Ali et. al 1999).
Upon inception, the importance of aid was however regarded as purely for relief purposes and was meant for returning nations to their resilient positions, but today, this has extended to include other antecedents such as: diplomatic, developmental, commercial/improving trade relationships and even cultural objectives. For example, France has been using aid to promote its culture in recipient nations- ‘promoting la Francophone’’ (Lancaster, 2007).
Hence, the field of development Corporation is today, dominated by many multilateral and bilateral actors such as United Kingdom, Germany, Sweden, Norway, Denmark etc. and the European Commission, United nation agencies, the International Development Association (IDA) and the World Bank which is mostly seen in the form of Official Development Assistance (ODA). This will be further explained in chapter three. Newcomers such as China, Russia, India, South Africa, and Brazil are gaining popularity (OECD, 2015).
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1.2 Foreign aid in Cameroon
Over the years, Cameroon has received aid in the form of Official Development Assistance (ODA), amounting to about $105billion from France, Japan, USA and UNDP with about $63billion from France only (African report 2021) and grants adjustment programs to NGOs from governments of developing countries. International aid agencies, the World Bank and International Monetary Fund. The advent of the economic crisis of the mid 1980s and the series of structural adjustment programs spearheaded by the IMF led to a drop in living standards of Cameroonians. The millennium development goals (MDGs) put in place by the United Nations (UN) in the early 2000 (health for all, education and an increase in life expectancy) came with an increase in flow of aid in Cameroon.
By intuitions, one would say that aid is beneficial, as it presents an opportunity for countries to raise revenue that can enable them to generate a sustainable economic growth, reduce poverty and increase their standards of living. According to McG illivray et al. (2006) foreign aid can help fill the savings gap in many developing countries as their savings remain too low to provide sufficient capital to meet up with investment demand. It also helps to close the foreign exchange gap, in order to provide them with export earnings required to import capital goods for investment, since international transactions cannot be executed with local currencies not backed by international purchasing power.
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CHAPTER TWO LITERATURE REVIEW
2.1 Conceptual Framework
2.1.1 Concept of Foreign Aid
Foreign aid also known as international Aid or overseas Aid is a voluntary transfer of resources from one country to another, given that at least partly the objectives of benefiting the recipient country. Aid may have other functions such as; It may be given as a signal of diplomatic approval, or to strengthen a military ally, to reward a government for behavior desired by the donor to extend the donors cultural influence, to provide infrastructures needed by the donor for resource extraction from the recipient country or to gain other kinds of commercial access,
Aid may be given by individuals, private organizations or governments. Standards delimiting exactly the kind of transfers that count as aid varies. For example, aid figure may or may not include transfer of military use.
The most widely used measure of foreign aid is Official Development Assistance (ODA). ODA is compiled by the development Assistance committee (DAC) of the organization for economic cooperation and development (OECD). The united nation uses the DACs ODA figures as their main aid figure because it is easily available, reasonable and consistently calculated over time and between countries.
Fig 2.1: PPC illustrating Economic Growth of an Economy
2.2 Relative Theories
2.2.1 The Two Gaps Model
The empirical model for estimating the aid growth relationship in Cameroon will be the Two Gap model, based on its explanation power in relation to the subject under investigation being that it takes into consideration the functional relationships between foreign Aid and economic growth of a country. This is contrary to the neoclassical and post Keynesian models such as the Cobb-Douglass production function and the Harrod -Domar growth model as used by other researchers.
There are various ways through which the foreign aid inflows of a country can impact its growth which can either be negatively or positively. For an economy to be balanced its Y (Income) = C (Consumption) + (I) Investment+ (G) Government spending. And what happens for some of these LEDC’s to be in need of aid is because most of those factors needed to be put in place to achieve a stable economic growth are not present hence the need for intervention by foreign rich countries.
The following factors enumerated below will influence those macro-economic variables mentioned above directly or indirectly hence resulting to a negative or positive impact in the economic growth level of a nation.
It was propounded by Walt Witman Rostow. The model postulates that economic growth occurs in five stages that is for an economy to witness growth it must pass through five stages which are; the traditional society, pre-conditions for take- off, take- off, drive to maturity, high mass consumption. For an economy to achieve or get to a different stage there must be series of activities and initiatives that should be put in place for a country to reach its maximum potential and achieve growth.
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CHAPTER THREE RESEARCH METHODOLOGY................................................. 18
3.1Description and Measurement of Variables ...................................... 19
3.2 Data Collection .................................. 19
CHAPTER FOUR DATA ANALYSIS AND INTERPRETATION .......................................... 30
4.1 Descriptive statistics ................................................................ 30
4.2 Unit Root Testing .................................................. 31
CHAPTER FIVE SUMMARY, CONCLUSION AND POLICY RECOMMENDATIONS ....................... 37
5.1 Summary of the study.................................. 37
5.2 Conclusion ............................................... 37
CHAPTER FOUR DATA ANALYSIS AND INTERPRETATION
4.1 Descriptive statistics
This chapter presents the data analysis and interpretation of the results to answer the research question and test the hypotheses stated. The data undergoes various stages of manipulation in order to ensure the selected model is quite applicable. First, the stationarity tests and co-integration tests are done on each variable.
Table 4.1: Descriptive statistics
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CHAPTER FIVE SUMMARY, CONCLUSION AND POLICY RECOMMENDATIONS
5.1 Summary of the study
This chapter summarizes the study while giving conclusion and providing policy recommendations. The results of the econometric analysis and the theories discussed in this paper are put together to provide a conclusion for the study. In addition, the chapter provides the limitations throughout.
The study has majorly looked at the impact of foreign aid on the economic growth of Cameroon. Through background study, the paper carefully and systematically looked at how foreign aid affects the economic growth of any country. Using the Vector Autoregressive (VAR) model. Reviewing the existing literature, showed a methodological gap in Cameroon and thus the author sought to fill this gap with this paper.
The study applied the two-gap model to answer the research question: what is the impact of foreign aid on the economic growth in Cameroon. The methodological approach applied the econometrics; stationarity test, Johansen cointegration test, VAR model and VECM on the time series data from 1970 to 2019.
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