Abstract:
Foreign aid strategies have undergone restructuring as donors adopt aid selectivity
practice to improve aid effectiveness. This study investigates the impact of aid selectivity
practice on aid effectiveness (aid-growth relationship) in Sub-Saharan Africa (SSA) and
several groups of countries within SSA from 1980 to 2012. Employing system generalized
methods of moments (system GMM) technique; the study produces strong evidence that
there is significant improvement in aid effectiveness due to aid selectivity practice.
