Foreign aid, legal origin, economic growth and Africa's least developed countries

The issue of foreign aid dependency in Africa remains controversial among policymakers. The Euro zone, which provides the bulk of foreign aid to developing countries, is currently implementing some austerity programmes. Consequently, this study investigates what really matters; the quantity or quality of foreign aid to support economic growth of Africa's least developed countries. We assess these issues within a country's legal origin framework. Our findings suggest that both quantity and quality of aid matters and that growth-enhancing effects of aid are more likely to be present in the former British colonies regardless of sample and model specification.