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ABSTRACT:

This study examines all available data to determine if ODA has a long-term beneficial impact on GDP, identify the significant issues with ODA expenditure and aid dependency in Afghanistan, and improve economic growth prospects in Afghanistan. Database for the period 2002-2021 is s considered for this study. The study uses time series analysis using the EViews 12 software. These tests were conducted using ADF and Phillips-Perron (PP), the Johansen cointegration test, and the Granger causality test. Johansen's cointegration test revealed the presence of two cointegration relationships between GDP and ODA variables. This suggests that GDP and ODA move together in the long run, indicating a mutual relationship or interdependence between the two variables. Moreover, Granger causality test results suggest that neither ODA nor GDP Granger causes the other.

KEYWORDS:

Foreign Aid, Foreign assistance, Economic Growth, Afghanistan

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