Internationale Zeitschrift für Wirtschafts- und Managementwissenschaften

The Impact of Government Spending, Trade, Foreign Aid and Foreign Direct Investment on Poverty Reduction in Africa: GMM Estimation

Abstract

Abdelbagi Edrees, Azali M, Azman Hassan and Norashidah Mohamed Nor

This study examined the impact of government spending, economic growth, trade, foreign aid and foreign direct investment on poverty reduction in Africa. the study covered the period from 1974 to 2013 using annual data from the World Bank and the United Nation Development Program. the study used GMM technique in order to estimate the impact of the mentioned variable on poverty in Africa. the empirical results suggested that foreign direct investment, economic growth, trade and government spending on education and health positively and significantly related to the poverty reduction during the period of interest, while foreign aid negatively contributed to the poverty reduction in Africa.