Aid dependence and economic growth in Ghana

The study examined the impact of aid on economic growth in Ghana for the period 1970-2011. Using the Autoregressive Distributed Lag (ARDL) methodology; the findings of the study suggest that foreign aid had a positive effect in the short run but has a negative effect in the long run. The investment and government consumption variables were significantly related to economic growth, while financial depth and trade did not have a significant impact on economic growth of Ghana. The findings of the study indicate that one size fits all strategy for the allocation of official development assistance might not be optimal. (C) 2014 Economic Society of Australia, Queensland. Published by Elsevier B.V. All rights reserved.