We examine the heterogeneous effects due to government stability of foreign aid on tax revenues in the West African Economic and Monetary Union countries over the period 1986-2010. We show that the tax effects of aid are gradual and varying across countries according to the level of government stability. The Panel Smooth Threshold Regressions indicate that at low levels of government stability, aid negatively affects tax performances. At high levels, it encourages tax collection. Consequently, we provide estimates of individual time varying coefficients of aid effects. In general, the positive effects are marked since the mid of 1990 decade. However, decomposing aid into its forms of loans, technical and non-technical grants provides nuanced results.

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Monitoring of structural change in Least Developed Countries (LDCs) requires examination of the changes in their structural economic vulnerability. This cannot be done by comparing the level of the Economic Vulnerability Index (EVI) that is calculated for each triennial review of the list of LDCs, because of the change in the design of the index. In this paper, the change in the structural vulnerability of LDCs is assessed according to two retrospective series of EVI, based on constant definitions, those respectively used at the 2006 and 2012 reviews. The real change in structural economic vulnerability is thus isolated from the impact of the changes in the design of the index (components, weighting, methods of calculation, and data updating).