Abstract

Purpose: This study examines how official development assistance (ODA) amounts and literacy rates complexly influence countries’ rates of economic growth.

Design/methodology/approach: We conduct a panel regression analysis of data from 2001 to 2020.

Findings: The major findings are: (1) ODA is more effective in countries with low literacy rates; (2) ODA can even have negative impacts in high-literacy countries; and (3) in addition to considering foreign aid and its applications, discussions of countries’ development should therefore take into account domestic systems and social geographies.

Research limitations/implications: Literacy rate is only one indicator of national development; a broader analysis is therefore needed to fully elucidate countries’ economic development.

Originality/value: While previous studies position foreign aid as a natural ground for examining economic development, this study widens the debate by highlighting the importance of countries’ domestic social infrastructure and the networks that undergird development.

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