Professional Documents
Culture Documents
1.0 INTRODUCTION
Massive aid and the quality of governance are two concepts that are inter-related on
developing and under developing countries. In recent years, policy makers and political
institutions are more likely to depend foreign aid on poor nation countries regardless on
the impact of foreign aid on the governance so far, the consequences for governance in
Somalia of the massive amounts of aid it has received since the failure of central
potentially of great importance for the incidence of poverty. While governance mostly
responsible external and internal intervention that planned to reduce the risks that
The tradition of giving foreign aid to developing or aid-needing country began after
World War II. Initially aid was given to the war-devastated countries to rebuild the
economies.Then in the early 1950s, the United States and the Soviet Union began
distributing aid tostrengthen the military capability of their allies and spread their political
ideologies. Since the end of the Cold War, in 1989, most aid has been targeted to promote
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During the 1990s, the goal of aid was to foster democratization and stability in
developing countries and to facilitate the transition to free market economies in former
communist countries. Since the late 1990s, foreign aid has been given to developing
institutions, and provide for humanitarian needs. Furthermore; the end of the cold war
also led to the shift of some aid from bilateral to multilateral aid.
In Africa the last 50 years, foreign aid transfers to governments in sub- Saharan Africa,
World Bank calculations show that if theoretical models had predicted correctly, foreign
aid transfers to Zambia, which began in the 1960s, would have by today pushed per-
capital income to over $20,000. In practice, however, Zambian income per capita has
stagnated at around $600 for years. This provides a stark example of the failures of
Researchers adopted a theory that reason’s foreign aid is the Sub-Saharan Africa’s
Gstoettner & Anders Jensen, 2010, Brautigam and knack (2004)). A theory of impact of
foreign aid it is implicit that recompense attention Gross domestic product (GDP),
In literature foreign aid is a concept that, while broadly understood, has been defined in a
not achieve objective X in the absence of aid for the foreseeable future.Also according
Perform many of the core functions of government, such as operations and maintenance,
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or the delivery of basic public services, without foreign aid funding and expertise . In turn
uses aid intensity as a proxy for aid dependence, aid as a percentage of Gross domestic
product, central government expenditure, and imports. Foreign aid can be defined as “the
benevolent donation to poor nations that they can sufficiently meet the needs of its
people” (harrison, 2005). While governance is defined is put under the theme of
participatory development where the bank wants to see a process by which people
Researchers adopted foreign aid is defined asituation in which a country cannot perform
many of the core functions of government, such as operations and maintenance, or the
delivery of basic public services, without foreign aid funding and expertise. In turn uses
aid intensity as a proxy for aid dependence, aid as a percentage of Gross domestic
product, central government expenditure, and imports (Brautisgam, 2000: 2). While
governance put under the theme of participatory development where the bank wants to
study foreign aid are considered three aspects such as a percentage of GNP, central
In the context of Somalia, since 1991, Somalia became prime example of poor nations,
which depend on foreign aid, and has experienced a persistent complex emergency due to
chronic food insecurity and lack of quality governance and widespread violence, and
recurrent droughts and floods. The 2011 drought—widely regarded as the country’s worst
marginal farming areas, resulting in famine in areas of Bay, Bakool, and Lower and
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Middle Shabelle regions, as well as among internally displaced persons in Mogadishu and
the nearby Afgoe corridor. Despite improvements in recent months, malnutrition rates
remain among the highest in the world, and ongoing insecurity in parts of southern and
This is crucial time if Somali does not decrease or substitute the strategy of depending
foreign aid it might be caused many problems such as increase borrowing grants and
loan, corruption, lack of law and order, decrease government revenue from tax, conflict
and lack of development and it is difficult to pay external debt (Mariola Gonzalo-
Delgado, 2011).According (Knack, 2001)finds that higher aid levels erode the quality of
The tradition of giving foreign aid to developing or aid-needing country began afterWorld
War II. Initially aid was given to the war-devastated countries to rebuild the economies.
Since the end of the Cold War, most aid has been targeted to promote economic growth
Aid, 2008). After that, aid was changed as new direction for collecting the variety
resources of many developing countries and widely usage for political issues.
However,the problem of foreign aid still exists in the developing and under developing
countries especially sub Saharan African countries like Somalia.According to our best
knowledge, currently, there is weak institutional framework in Somalia that shows there
is corruption and lack of political accountability most frequently cited as a reason for the
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aid has on the quality of institutions in receiver countries itself.For that reason, this study
examines the impact of foreign aid for instance aid as a percentage of GDP, government
The main purpose of this study is to investigate the impact of foreign aid on the quality of
in Banadir region.
Banadir region.
region.
in Banadir region?
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1.6 SCOPE OF THE RESEARCH
This study will determine the role of foreign aid on quality of governance on Banadir
region with precise consideration on economic and institutional developments and the
study will be continued February up to June 2015 using cross sectional study.
This study is important for all developing countries, especially Banadir region to be as
literature and the findings of this study are gigantic for Somali governance in order to
improve their functions on the quality of governance. It also explores the impact of
contributes academics; policy-makers are too important this study. This research also is
useful for future researchers who interests to make research in this topic as literature
review and also is highly encouraging impact of foreign aid in Banadir region.
Aid is defined as ‘a situation in which a country cannot perform many of the core
public services, without foreign aid funding and expertise(Brautisgam, 2000: 2).Foreign
aid defines that “Economic, technical, or military aid given by one nation to another fir
the purposes of relief and rehabilitation, for economic stabilization, or for mutual defense.
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flow of official financing to the developing world that is concessional in character,
While governance is defined, is put under the theme of participatory development where
the bank wants to see a process by which people influence decisions that affect them
(Acemoglu& Johnson, 2005, p.950), is believed to play a key role in explaining this
phenomenon.
This is the conceptual framework of foreign aid on the quality of governance, so foreign
aid measured according to (Karen L. Remmer, 1999) three indicators such aid as
product (GDP) and foreign aid as a percentage of imports (also as reported by the World
Bank 2001); while quality of governance the world bank Institute suggests that currently
there are more than 140 sets of governance indicators available, comprising of thousands
distinguished three main dimensions of good governance according to(Asongu, 2013) and
Accountability, which includes civil liberties, The rule of law, which includes protection
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FOREIGN AID QUALITY OF
GOVERNANCE
(IV)
GOVERNMENT ACCOUNTABILITY
CORRUPTION
GROSS DOMESTIC PRODUCT
IMPORT
During this study the researchers faced some limitations, which were beyond researchers’
control since this may involve external factors that are out of researchers plan such as
research data collection met more complicate from respondents and their different levels.
While some of respondents did not give consideration the questionnaire distributed;
others did not have enough time to complete the questionnaire. In addition to this study,
there are very little scholars made investigation for impact of foreign aid on the quality of
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CHAPTER TWO
REVIEW LITERATURE
2.0 INTRODUCTION
This chapter, the researchers will discuss literature review that related to Impact of
foreign aid on the quality of governance. The review specifically emphasizes aid
effectiveness and the institutional quality that almost scholar’sbeliefs foreign aid has
effects on the institutional quality building such as rule of law, control of corruption, good
governance, and finally accountability and transparency. During this sections will covered
foreign aid , types of foreign aid, related literature review and finally summary and
conclusion.
Foreign aid is a concept that, while broadly understood, has been defined in a variety of
ways, according(lensink, 1993: 13) defined a country is aid dependent if it will not
maintenance, or the delivery of basic public services, without foreign aid funding and
expertise. In turn uses aid intensity as a proxy for aid dependence, aid as a percentage of
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Also Foreign aid can be defined as “the benevolent donation to poor nations so that they
can sufficiently meet the needs of its people"(Hoy, 1998).On the other hand aid as a
official donor agencies. This assistanceincludes grants and loans made on concessional
In addition; foreign aid (ODA) is defined as the flow of official financing to the
developing world that is concessional in character, namely grants and loans with at least a
considered as the technical definition of foreign aid. Foreign aid or ODA is a "transfer of
resources on concessional terms undertaken by official agencies; which has the promotion
Foreign aid has different dimensions or characteristics in this chapter there are three main
characteristics and they are Government expenditure, Gross national product, Import.
2.2.2 Gross domestic product is the monetary value of all finished goods and services
produced within country’s borders in specific period of time. It includes all the private
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and public consumption, government outlays, investments and export less imports that
2.2.3 Import: is to bring or carry in from an outside source, especially to bring in (goods
exercised which includes the process by which governments are selected, monitored and
replaced; the capacity of the government to effectively formulate and implement sound
policies; and the respect of citizens and the state for the institutions that govern economic
and social interactions among them.While governance is defined is put under the theme of
participatory development where the bank wants to see a process by which people
aid dependence is a concept that, while broadly understood, has been defined in a
diversity of ways. Lensink and White (1999: 13) defined; A country is aid dependent if it
will not achieve objective X in the lack of aid for the predictable future. Riddell (1996:
24) has called it that process by which the constantdelivery of aid appears to be making
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Also; Sobhan (1996: 122) defines it as a state of mind, where aid receivermiss their ability
to think for themselves and thereby relinquish control. Brautigam (2000: 2), from whom
the previous definitions were met, imagines aid dependence as a situation in which a
operations and maintenance, or the delivery of basic public services, without foreign aid
2.4.1.1 Accountability: Various aspects of the political process, especially civil liberties,
2.4.1.2 Rule of law: The incidence of both violent and non-violent crime, the
for private gain. This ranges from the frequency of ‘additional payments to get things
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2.5 TYPES OF FOREIGN AID
According to the foreign aid types, there are four major types of foreign aid namely;
Bilateral, Multilateral, Tied, and Project aid. Bilateral aid is assistance given by a
government directly to the government of another country. It is when the capital flows
United Nations and International Monetary Fund that are then used to reduce poverty in
developing nations. Tied aid is foreign aid that must be spent in the country providing the
aid (the donor country) or in a group of selected countries.Developed country will provide
a bilateral loan or grant to a developing country, but mandate that the money be spent on
goods or services produced in the selected country. Project aid – when the funds are used
GOVERNANCE
There are pure linkage among foreign aid and the quality of governance which some
scholars proved the evidences in such relationship. Beyond questions of aid effectiveness,
there emerged concerns of aid dependence being linked with the worsening quality of
governance. Brautigam and Botchwey (1999,) both argued that there is great relationship
undermined institutions and also Knack (2001), whose findings are re-examined in (Ear,
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2007) offers a significant literature review of how aid dependence can worsen the quality
and rule of law. His own cross- sectional analysis finds that a negative relationship exists
corruption, and encouraging rent seeking and increasing conflict over control of aid
On the other hand, Mosley et al. (1987) there is a significant relationship between aid and
the growth rate in developing countries and similarly, Boone (1996) argue aid has no
effect on growth or investment and more recent the researchers focused on examining the
conditions under which aid could be growth enhancing and mainly began with the work
of Burnside and Dollar (1997, 2000) involved the interaction term between aid and a
policy variable (representing fiscal, monetary, and trade policies) and finally aid is
effective but only if the country has the following criteria such good monetary, fiscal and
trade policies.While the absence of good governance aid is most likely to fail and actually
foreign aid can be well used if the beneficiary country’s institutions are strong.
suggesting that aid is translated into increased private and public sector consumption,
rather than investment in developmental goals. While the positive impact of aid on
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financial institutions and recipient nations, the results presented here point to the problem
of aid fungibility. High levels of aid dependence have failed to create strong incentives
for governments to marshal new resources for developmental goals instead; aid has
revenue effort.
aid and good governance when donors attach conditions on how aid is spentand also
when aid comes from democratic donors (Bermeo 2011), or when venerable countries
above statement aid inflows may be similar to oil concessions, allowing rulers a source of
Consequently; developing skeptical consensus has led to questions of whether aid can
bring about democracy and good governance anywhere. In fact, Knack (2004) reaches the
dismal conclusion that any positive effects of aid on democratization are compensated by
other effects of aid that tend to undermine democratic development.So, aid allocation is
not randomly assigned; that is donors give aid for reasons that are not independent of
rights and governance in receivercountries. Many motivations for providing aid are likely
unobservable, which can lead to bias in the estimation strategy. Scholars have recognized
the need for a method to overcome the problem of endogenous aid giving, but have been
largely unable to identify a credible source ofexogeneity. Finally many scholars argue
that foreign aid has no effect (Knack 2004), or has a negative effect, on rights and
governance due to the inefficient spending by receiver governments (Burnside and Dollar
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2000) and the politically motivated agendas of donors (Alesina and Dollar 2000;
Dreheretal. 2010; Schraeder, Hook and Taylor 1998). Perversely, receiving aid may
oppressive institutions (Bueno de Mesquita and Smith 2009b; Brautigam and Knack
Yet; (Grossman 1989; IADB 1994; Rodden 2002, forthcoming; Shadbegian 1999, Stein
1999, Dougan and Kenyon 1988; Hines and Thaler 1995; Holcombe 1996; Strump1998),
these scholars may looked another angel that is foreign aid relations with fiscal
governmental size, depending on the incentives it creates for state or local governments to
rely on grants and transfers from the central government as opposed to own source
revenues. The greater the dependence on the former in relation to total revenue sources,
the greater the tendency for government expansion which means that federal transfers to
In Somalia since its formation in 1960 from the union of British Somaliland and Italian
Somaliland, the Somali Republic was always dependent on foreign aid to balance its
operations and development budgets. In each of the three years after independence, the
Republic financed 31 percent of its budget with grants from its former colonizers.
According to (Hussein, 2010) illustrates that foreign aid has more influenced in the
country as we see it in the next two tables, In 2011, for the fourth year, Somalia is judged
as the most acutely failed state in the world.A failed state is a country characterized by
poverty, insecurity, and a disregard for human rights. In introducing this year’s current
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ranking, Foreign Policy wrote, “Somalia’s unending woes are the stuff hopelessness is
made of.” The purchasing power parity adjusted Gross Domestic Product (GDP) of
Somalia is $5.4 billion, or a per capita income of $600, given its population of nine
index is
Used. Only 39 percent of the population can read and write;life expectancy is merely 50
years; and the infant mortality rate is 110 per 1,000 births. Furthermore, only 29 percent
of the population has access to clean drinking water and only 30 percent of children are
enrolled in primary schools. This both table’s shows the huge foreign aid in Somali in any
sector in Somali’s life.
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2Governing Justly and Democratically 1.914 8.687 11.270 8.550
2.1 Rule of Law and Human Rights — — 0.500 —
2.2 Good Governance 1.514 3.977 5.220 4.000
2.3 Political Competition and
Consensus-Building 0.400 3.710 4.550 3.550
2.4 Civil Society — 1.000 1.000 1.000
3 Investing in People 9.253 9.055 6.550 6.550
3.1 Health 2.748 2.550 1.550 1.550
3.1.6 Maternal and Child Health 0.248 1.550 1.550 1.550
3.1.8 Water Supply and Sanitation 2.500 1.000 — —
3.2 Education 6.505 6.505 5.000 5.000
3.2.1 Basic Education 6.505 6.505 5.000 5.000
4 Economic Growth — — 3.000 4.268
4.6 Private Sector Competitiveness — — 3.000 4.268
5 Humanitarian Assistance 248.630 130.786 TBD TBD
5.1 Protection, Assistance and Solutions 248.630 130.786 TBD TBD
USAID Website
transfers tends to lead to the budgetary growth of the overall public sector. Since high
levels of dependence on external revenue sources also decrease the incentives for citizens
to monitor governmental performance, corruption, waste, and rent seeking may increase
rapidly, resulting not only in larger but also more inefficient public sectors (Brautigam
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2.7 SUMMARY AND CONCLUSION
Researchers have reviewed many literature closely related the research topic of foreign
aid and the effects of aid on the quality of governance. These articles founded that datafor
related to academic research of foreign aid. Although showed possible results like foreign
aid impact on the quality of governance and some scholarssuggested that foreign aid has
negative impact on the quality of institution in receiver nations and mentioned that Since
high levels of dependence on external revenue sources also decrease the incentives for
citizens to monitor governmental performance, corruption, waste, and rent seeking may
increase rapidly, resulting not only in larger but also more inefficient public sectors. Thus
impact aid on governance has been studied with mixed results according to this
contravention there is no real evidences that shows whether foreign aid has neither
In conclusion these chapter emphases on previous literature related to this study, so these
chapter offerings the definition of foreign aid on the quality of governance shadowed by
governance. Thus this custody examine the characteristics of foreign aid that researchers
are extremely and discussed relationship between foreign aid on the quality of
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CHAPTER THREE
METHODOLOGY
3.0 INTRODUTION
gathering data including research design, research population, sample size, sampling
The study was conducted through descriptive and explanatory design. The researchers
specially correlation analysis in order researcher want to predict and describe the
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3.2 REASECH POULATION
The population of this study was derived from the public workers in Benaadir Region,and
The researchers used Solvent’s formula to calculate the sample size, with maximum
N
acceptable error 5 %. N¿
1+ N a 2
205
n¿ 2 = the sample sizes of the study was 135 employees from local
1+ 205 ( 0.05 )
refers probability sampling procedure in which the population are more relevant strata.
The main strata was public workers toward impact of foreign aid on the quality of
governance in Bnadir region, as well as the researchers make sure to reduce the bias of
this procedure.
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3.3 RESEARCH INSTRUMENT
questions. The researchers select this method of instrument because it will provide
opportunities to get together face to face the respondents and will explain the purpose of
this study. The Questioner of this study will build up by the researchers according to the
literature so that researchers will adjust the current situation according to respondents.
Also the questionnaire will contain five parts: Part one discussion of respondent's profile,
part two will contain questions about objective one and objective two and objective
To get the reliability of the study the researcher analyzes Cronbach‟s Alpha which
proposes 0.7 to ensure the reliability of the study and make acceptable for interior
instability of variables; the coefficient of this study will be at least 0.75, which is
acceptable for further research. The researcher makes consultation scholars which experts
for this topic to guarantee validity of the study. So that, the researchers will enhance the
quality of the study and also the researchers will make sure any effort to reach validity
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3.1 DATA GATHERING PROCEDURES
Data was collected from both primary and secondary sources, primary data was obtained
from key directors and staff in the local government employees and secondary data was
Specifically, the researchers were seriously particularly requesting the respondents of the
following (1) to sign the informed consent (2) to answer all questions hence should not
leave any item unanswered (3) to avoid biases and to be objective in answering the
questionnaires. The researchers were tried retrieving the questionnaires within two weeks
The data collected was organized, summarized, statistically treated and drafted in
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3.5. DATA ANALYSIS
This study applied quantitative methods especially correlation design for analyzing more
about relationship between foreign aid on the quality of governance and regression to
analyze our research hypothesis.Descriptive to test the mean and standard deviation of
respondent’s characteristics, also was used reliability test for internal consistency of
items.
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3.6 ETHICAL CONSIDERATIONS
concerted and conscious effort was making at all times to support this promise. A promise
will be given to the any respondents that their names were not being mentioned in the
research report.
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CHAPTER FOUR
4.0INTRODUCTION
This chapter showed the presentation of data analyses and interpretation. The data
analysis and interpretation were based on the research objectives. The presentation was
divided in two parts, the respondents profile or demographic information, while the
second part deals with the presentation, interpretation and analysis of the research
questions.
This section presents the background information of the respondents who participated in
the study. The purpose of this background information is to find out the characteristics of
Table 4.1 shows the profile of respondents in terms of gender, age, marital status,
education level and number of years of work experience. Of the 135 respondents, 99 were
men (73.3%) and 36 were women (26.7%). In terms of age, 59.3% of the respondents
were less than 25 years of age, 34.1% in the 26–30 age range, 2.2% in the 31–35 age
range, and 4.4% aged 36 and above. Most respondents were single (70.4%), 25.2%
married, divorce (3.7%) and windows (0.7%). In terms of educational level, 80.0% of the
respondents were bachelor degree, 6.7% master degree, (11.1%) diplomas, and while
2.2% were PHD. The respondent’s experience, where 45.2% of the respondents has 1 to 2
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years’ experience, 37.8% in 2 to 4years experience and 11.9 % in 5 to 10 years and In
Male 99 73.3
Female 36 26.7
26-30 46 34.1
31-35 3 2.2
Above 36 6 4.4
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Marital Status Percentage
Married 34 25.2
Single 95 70.4
Divorced 5 3.7
Window 1 0.7
Diploma 15 11.1
Master 9 6.7
PHD 3 2.2
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Experience Frequency Percentage
After background information, the researchers went ahead to present the descriptive
analysis from the opinions of the respondents. The researchers selected based on
Mogadishu local government, the result from this sample can be generalize to all local
government institution.
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Table 4.2 Descriptive For Foreign Aid Items
14 FAIM03 Agree
4.12 1.153
30
15 FAGE01 3.98 1.255 Agree
The above table 4.2.1 presented the mean index, Standard deviation, and interpretation of
the result for the all questions asked for the respondents with the Independent variable
(IV), researcher was analysis here the interpretation of the respondent’s answers. So, the
first question has mean index 3.78and Stander deviation 1.407which shows that
respondents denoted that they are Agree in this question. The second question obtained
The third question has 3.12mean index and standard deviation 1.461for interpreting that
they are Neutral for this question. The mean index for 4th question was 3.67; standard
deviation of 1.216and the respondents denotes agree in this question. The 5th question
was scored mean 3.90and standard deviation of 1.323in according of the interpretation
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respondents denotes agree. The 6th question obtained mean3.92standard deviation of
1.270and interpretation of this question ware agree. The 7 th question has 3.13mean index
and standard deviation 1.611for interpreting that they response Neutral in this question.
The mean index for 8th question was 3.79; standard deviation of 1.467and the respondents
denotes agrees in this question. The 9th question was scored mean 3.84and standard
deviation of 1.360in according of the interpretation respondents denotes agree. The 10th
question ware Agree. The 11th question has 4.03, mean index and standard deviation
1.332, for interpreting that they response for Agree in this question. The mean index for
12th question was 3.79standard deviation of 1.228, and the respondent denotes Agree in
this question. The 13th question was scored mean 4.16, and standard deviation of 1.171, in
according of the interpretation respondents denotes Agree. The 14 th question was scored
denotes agree. The 15th question obtained mean3.98, standard deviation of 1.255and
interpretation of this question ware Agree. The 16 th question has 3.93, mean index and
standard deviation 1.228, for interpreting that they response for Agree in this question.
The 17th question has 3.97, mean index and standard deviation 1.287, for interpreting that
they response for Agree in this question. The 18th question has 4.02, mean index and
standard deviation 1.237, for interpreting that they response for Agree in this question.
The 19th question has 3.80, mean index and standard deviation 1.315for interpreting that
they response for Agree in this question and the final 20th question has average means
index of the all questions was 3.91, Standard deviation was 1.335and respondents were
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TABLE 4.3 Descriptive For Quality of Governance Items
33
Average mean 4.04 1.508 Agree
The above table 4.2.2 presented the mean index, Santander deviation, and interpretation
of the result with the all question asked for the respondent for the Dependent Variable
(DV), and researchers, were analysis here the interpretation of the respondent’s answers.
The first question has mean index 4.10 and Stander deviation 1.211which shows that
respondents denoted that they are Agree in this question. The second question obtained
mean 4.01, standard deviation of 1.212 and interpretation of this question ware Agree.
The third question has 3.43 mean index and standard deviation 1.768 for interpreting that
they agree for this question. The mean index for 4th question was 3.98; standard deviation
of 1.143 and the respondents denotes agree in this question. The 5th question was scored
mean 4.05 and standard deviation of 1.161in according of the interpretation respondents
denotes agree. The 6th question obtained mean 3.98, standard deviation of 1.278 and
interpretation of this question ware agree. The 7th question has 4.14 mean index
and standard deviation 1.247 for interpreting that they response for agree in this question.
The mean index for 8th question was 4.18; standard deviation of 1.202 and the
respondents denotes agree in this question. The mean index for 9th question was 4.48,
standard deviation of 4.581 and the respondents denotes strongly agree in this question.
The mean index for 10th question was 4.13; standard deviation of 1.318 and the
respondents denotes agree in this question. The mean index for 11 th question was 3.99;
standard deviation of 1.246 and the respondents denotes agree in this question. The mean
index for 12th question was 4.05; standard deviation of 1.224 and the respondents denotes
agree in this question. The mean index for 13th question was 4.06;standard deviation of
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1.244 and the respondents denotes agree in this question. The mean index for 14th
question was 4.08; standard deviation of 1.282 and the respondents denotes agree in this
question.Therefore the final Average means index of the allquestions was 4.04, Standard
The first objective of this study was to determine the impact of foreign aid on the quality
of good governance in Banadir region, thereby the below table shows that there is
moderate relationship between foreign aid and quality of governance as indicated the
result .321 which mean the increase or decrease of one level for foreign aid may cause a
The second objective of this study was to determine the impact of GDP on the quality of
governance in Banadir region, thereby the lower table shows that there is moderate
relationship between GDP and quality of governance as the result indicated .376. Which
mean the increase or decrease of one level for GDP may cause a change of .376% of
quality of governance. Therefore the correlation coefficient between GDP and quality of
The third objective of this study was to determine the impact of import on the quality of
governance in Banadir region, thereby the lower table shows that there is weak
relationship between import and quality of governance as the result indicated .442. Which
mean the increase or decrease of one level for import may cause a change of .442% of
35
quality of governance. Therefore the correlation coefficient between import and quality of
The four objective of the study was controlled the impact of government expenditure on
the quality of governance in Banadir region, thus the following table indicates that there
result shows .567 which means the increase not decrease one level for government
Variable 1 2 3 4 5
In table 4.3.1 shows that Foreign aid and quality of governance has negative relationship
and researchers reject the null hypothesis and accept the alternate H 1 so that the increase
or the decrease of one level of foreign aid cannot damage the quality of governance.
36
While the dimension of gross domestic product (GDP) and quality of has negative
relationship and researchers rejected the null hypothesis, and accepted the alternate H 1, so
that the increase of one level or decrease foreign aid does not causes any change for the
governance so, researchers rejected the null hypothesis, while accepted the alternate H 1,
whatever occurs foreign aid in terms of increase or decrease levels that aid participate
Finally, the dimension government expenditure and quality of governance has also
government and accepted the null hypothesis, whereas rejected the alternate H 1, so the
increase of one level of government expenditure causes the same quality of governance.
Quality of Governanc
37
4.4 DISCUSSION
This study was intended to investigate the impact of foreign aid on the quality of
governance in Banadir region-Somalia. The objective of this study was to know the
relationship between foreign aid and quality of governance. The questionnaire consisting
twenty eight statements was used for collection of data and was distributed among 135
employees in Banadir local government. SPSS was used for analysis.An empirical
investigation was also undertaken, using the simple correlation analytical technique,
exposes the dimensions of foreign aid –gross domestic product (GDP), import, have
The result shows that the two dimensions of GDP and Import have negative correlation
with (DV) quality of governance while other government expenditure dimension have a
Not only had this research found correlation between foreign aid and the quality of
governance but the direction of the impact is not obvious, there is mixed of result Knack
and Rehman(2007) as well as Brautigam and Knack (2004) report negative association
between foreign aid and governance quality but it depends on how political institution
deals with good governance indicators and researchers found that all foreign aid
dimension does not cause any significance change except one dimension of government
expenditure has strong positive correlation with the quality of governance in Banadir
region -Somali.
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CHAPTER FIVE
5.0 INTRODUCTION
This chapter presents the conclusions and the recommendations following the study
objectives.
5.1 CONCLUSION
The aim of this study was to investigate the relationship between foreign aid on the
undertaken, using the simple correlation analytical technique, specially the Pearson
product movement correlation coefficient (PPMC). The first objective of this study was to
know the relationship between foreign aid and quality of governance the study found a
moderate positive .321 relationship between foreign aid and quality of governance in
The second objective of this study was to describe the effect of GDP to quality of
governance. The study discover that a moderate (.376) correlation between gross
Somalia.
The third objective of this study was to investigate import on quality of governance. The
study found weak (.442) relationship between import and quality of governance in local
government Banadir - region Somalia. The study exposed that there is strong positive
39
5.2 RECOMMENDATIONS
We recommend that foreign aid dimensions, import and Gross domestic product does not
Banadir region should decrease or a void using foreign aid development programs.
40
REFERENCES
Asiedu. (2002). Foreign Aid, Foreign Direct Investment And Governance In Africa.
Boston.
Boone. (1996, April 1). Political Economic Aid And Governance In Combodia. Asian
Journal Of Political Science, 15, 68-96.
Brautisgam. (2000: 2). The Political Economy Of Aid And. Asian Journal Of Politica
Science, 15.
Drometer, M. (2013). Institutional Quality And Foreign Aid. Institute For Economic
Research At The University Of Munich , 1.
Dollar, B. A. (2000). Impact Of Foreign Aid And The Quality Of Governance. M. In'airat
/ Journal Of Economies, Finance And Administrative Science (2014), 63-68.
Ear, S. (2007). The Political Economy Of Aid And Governance In Combodia. Asian
Journal Of Political Science, 30.
Haider, U. Q. (N.D.). Foreign Aid, External Debt And Economic Growth Nexus In Low-
Income Countries: The Role Of Institutional Quality. 22.
Harrison. (2005). Foreign aid, Foreign direct investment and governance in africa.
Hussein, W. A. (2010). Role of International Aid and Open trade policies in Rebuilding
the Somali State. Bildhaan, 11.
41
Knack, K. (1995). Aid Dependence And The Quality Of Governance. Southern Economic
Journal.
Knack, S. E. (2001). The Political Economy Of Aid And Governance In Cambodia. Asian
Journal Of Political Science, 15, 68-96.
Lensink, W. ((1993: 13). The Political Economy Of Aid And. Asian Journal Of Political
Science, 15, 68,96.
Larsson. (2009). Institutions, Aid and Growth; evidence from panel data. Jonkoping
international business school , 25.
Mathias Busse, S., &Groning. (April 2009). Does Foreign Aid Impropves Governance?
Economic Letter, 6 (2).
Mariola Gozalo-Delgado, F. R.-J. ( 2011, December 6,). Foreign Aid And Recipient
Government Behavior In Nicaragua. International Journal Of Trade, Economics
And Finance, , Vol. 2,.
Markus Gstoettner, A. J. (2010, April 11). Aid And Public Finance: A Missing Link. Atl
Econ Journal, 38:217–235.
42
Thiele, P. S. (2009). The Impact Of Aid On Bureaucratic Quality: Does The Mode Of
Delivery Matter? Kiel Institute For The World Economy, , 17.
43
APPENDIX A
Time Framework
44
APPENDIX B
1 Internet access $ 35
2 Transportation Expenses 25
3 Photocopying Expense 15
5 Telephone Expense 10
C Book Publishing 8
8 Miscellaneous Expense 8
TOTAL: $ 228
45
APPENDIX C
QUESTIONNAIRE
Dear Respondents
administration faculty of economic and social science. We are resounding out a research
“ you have been selected to participate in this study as voluntary and therefore kindly
requested you to answer the questions below the information given here and it will be
Please tick (√) where applicable or fill in the blank space provided.
1. Gender
1) Male 2) Female
2. Age
3. Marital status
1) Married 2) Single
3) Divorce 4) window
46
4. Education
5. Experience
Please rate the following statements based on this scale where 1= strongly disagree,
No. Statements 1 2 3 4 5
47
6. Foreign aid contributes political constraints which more challenge
to quality governance.
joblessness
crops
. aid.
48
.
. policy.
. enterprises.
Corruption
Accountability
delivery
Rule of law
49
3 Rule of law makes check and balance in governance institutions
Thanks
50