Examining the Effects of Agricultural Aid on Forests in Sub-Saharan Africa: A Causal Analysis Based on Remotely Sensed Data of Sierra Leone

Abstract

In sub-Saharan Africa, extreme poverty highlights the tension between development aid and the environment. Foreign aid is considered one of the most important factors affecting forest health in this region. Although many studies have empirically examined the effects of different kinds of foreign aid on forests, few have investigated the potential impact of agricultural aid. This study investigated the causal effects of agricultural aid on forests in Sierra Leone, a country that relies heavily on agricultural products. We constructed a fine-grained (16-day) indicator of forest growth from 2001 to 2015 by combining remotely sensed data of land cover and the Normalized Difference Vegetation Index. The high frequency of forest growth data enables us to trace the dynamic causal process. To reduce the confounding effects of heterogeneity, we applied a difference-in-difference design with data at the sub-national level to estimate the causal effect. This study provides robust empirical evidence that foreign agricultural aid harms forests both in the short term (i.e., 16 days) and long term (i.e., years) in Sierra Leone. Agricultural aid projects with agricultural development as their primary objective or aid projects without specific objectives lead to the highest levels of forest degradation.