Impacts Of Official Development Assistance(ODA)on Poverty Reduction

The global rate of underprivileged population(at the international level of 1.9per capita per day as a guideline)is about 10.7 % of the world's population,or 767 million people(2013).That means 11 out of every 100 people live in extreme poverty.As an important means of alleviating poverty,ODA has adhered to the goal of eliminating extreme poverty and stimulating the economic development of recipient countries.The number of global official development assistance increased from58,242 million dollars in 1990 to 15,7676 million dollars in 2016,which is as triple as before.This article will examine whether such a huge social resource has any effect on poverty reduction and how much it can produce.This paper selects a 14-year sample data from 102 countries receiving official development assistance(ODA)to analyze the poverty reduction effect of ODA.Firstly,the mechanism of official development assistance is analyzed.Secondly,it's an empirical study of the role of official development assistance played in alleviating poverty,which including the role of official development assistance in economic growth and official development assistance and economic growth have contributed to poverty alleviation.Finally,according to the results of the empirical analysis,the poverty reduction effect of official development assistance is measured.In order to avoid the possible endogenous problem between economic growth and poverty indicators in the process of empirical analysis,two-stage least square method(2SLS)is adopted.Through the empirical research in this paper,we have analyzed that ODA plays a very positive role in economic growth and poverty alleviation.Taking other factors as equal,for every 10% increase in official development assistance,the growth rate of per capita GDP will increase by 6.42%(if the per capita GDP growth is 5%,the per capita GDP growth will increase from 5% to 5.32%).With other factors remaining unchanged,taking extreme poverty as an example,for every 1% increase in the share of official development assistance in GNI(eg 10%-10.1%),the povertyrate will decrease by 0.128%(10%-9.985%).The "Millennium Development Goals" proposed by the United Nations have been further developed into "the goal of sustainable development",the alleviation of poverty and the elimination of extreme poverty are still problems that need to be solved urgently.Therefore,we should strengthen our emphasis on official development assistance.Since the early days of China,China began to carry out foreign aid,receive the aid from other countries as well.But from the beginning of the 21 st century,China has undergone a gradual shift from this dual status to the status of a single aid-giving country.China's official development aid keeps increasing;it is because China is in this transitional period.Hence China should learn from the experience of international aid-giving countries,focus on the "effectiveness" of official development assistance and improve the efficiency of foreign aid.