Foreign aid donation and the donor countries’ economic growth: an empirical study of OIC member countries

Broni, Mohammed Yaw and Duasa, Jarita and Lacheheb, Zakaria and Abdul Samad, Sakinah (2025) Foreign aid donation and the donor countries’ economic growth: an empirical study of OIC member countries. Revelation and Science, 2 (1). pp. 92-108. E-ISSN 2229-9947

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Abstract

The Islamic worldview mandates Islamic countries to show benevolence, through foreign aid donations, towards their foreign counterparts experiencing poverty and deprivation. However, Islamic countries are faced with a possible conflict of interests in their attempt to show benevolence to their vulnerable foreign counterparts, and to pursue the achievement of economic growth concurrently. This study aims to investigate whether such a conflict of interests exist by estimating the impact of foreign aid donation on the donor countries’ economic growth, using Organization of Islamic Cooperation (OIC) member countries as a case study. The Generalized Method of Moments (GMM) technique was employed to analyze data of eleven OIC member countries spanning 2016 to 2020, based on an augmented Cobb-Douglas production model. The results indicate that foreign aid donation has no significant impact on the donor countries’ economic growth. Foreign aid policies of the respective governments should consider increasing the countries’ foreign aid expenditures, in order to assist many deprived countries whose economic sustainability depends on international development assistance

Item Type:	Article (Journal)
Uncontrolled Keywords:	Foreign aid donations, Economic growth, Islamic Worldview, OIC, GMM
Subjects:	BPH Islamic Economics > BPH72 Economic development. Growth. Sustainable development. Sustainability H Social Sciences > HB Economic Theory > HB846 Welfare theory
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Kulliyyah of Economics and Management Sciences > Department of Economics
Depositing User:	Prof. Dr. Jarita Duasa
Date Deposited:	12 Jun 2025 09:23
Last Modified:	12 Jun 2025 09:23
URI:	http://irep.iium.edu.my/id/eprint/121462

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