Aid and Economic Development in the Central African Republic

The aim of this study is to assess the effect of official aid on economic development in CAR over the period 1990-2017. We began by highlighting the effect of official development assistance on economic growth in CAR using an ARDL model. We then determined the effect of official development assistance on inequality in CAR using a second-order Vector Autoregressive model. The results obtained from World Bank and SWIID data suggest that official development assistance contributes to economic growth in CAR in the long term. However, it contributes to exacerbating inequalities. These findings therefore call on the authorities to combine aid programmes with genuine redistribution policies, in particular investment in social services such as education and health. They should also place particular emphasis on institutional quality, including the fight against corruption.