Does international finance promote the development of the blue economy in emerging countries? The case of SIDS and coastal countries in Africa

Outrah Souad, Radi Bouchra

This study empirically assesses whether international funding for the development of the blue economy promotes measurable growth in recipient countries, and through which mechanisms. The sample consists of small island developing states (SIDS) and African coastal countries. Drawing on research on the effectiveness of development aid and an institutional and theory-of-change approach to blue finance, the explanatory variable related to blue finance received is derived from disbursements reported in the OECD Creditor Reporting System, lagged by one period. The dependent variables are fisheries production, marine protected areas, and a maritime governance index for each country derived from the literature. Based on a dynamic-system GMM panel analysis covering the period from 2010 to 2024, the results indicate that lagged blue finance has no effect on fish production but does have a positive effect on marine protected areas. This effect operates through a chain of mediation: Blue finance improves maritime governance, which in turn improves marine protected areas. International blue finance thus appears to support marine conservation primarily by strengthening governance, rather than by directly affecting production or conservation, thereby offering a distinct, mechanism-based contribution to the debate on the effectiveness of blue finance.