Fiscal effects of foreign aid in a federal system of governance

Swaroop, Vinaya; Jha, Shikha; Rajkumar, Andrew Sunil

doi:10.1016/s0047-2727(00)00070-0

Cited by 113 publications

(48 citation statements)

References 10 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…A related literature looks at the impact of aid on various categories of public expenditure and revenue; health and education expenditures can be important to MDG achievement if the services reach the poor. Recent studies include Feyzioglu, Swaroop, and Zhu 1998;Franco-Rodriguez, McGillivray, and Morrissey 1998;McGillivray and Ahmed 1999;Swaroop, Jha, and Rajkumar 2000;McGillivray and Morrissey 2001b;McGillivray 2000;Mavrotas 2002bMavrotas , 2003and McGillivray and Ouattara 2005. It is generally concluded that aid results in increased public expenditure, although it can also result in decreases in tax revenue and increases in public sector debt.…”

Section: Aid Effectiveness: a Brief Surveymentioning

confidence: 99%

Development assistance and development finance: evidence and global policy agendas

Addison

Mavrotas

McGillivray

2005

J of Intl Development

View full text Add to dashboard Cite

Understanding the development effects of official aid is crucial to building a better bridge between research and policy. This paper reviews the current evidence regarding the impact of aid on growth and poverty reduction, and develops a new narrative. In the light of this narrative, the paper then examines aid trends, focusing on the regions of sub-Saharan Africa and the Pacific. The paper then turns to recent discussion of new and innovative sources of development finance and considers how research has influenced the policy debate through a recent UNU-WIDER study for the UN General Assembly. The paper concludes that aid broadly works, that poverty would be higher in the absence of aid, and that the shortfall in aid during the 1990s has, by implication, made it more difficult to meet the Millennium Development Goals. Hence, a considerable catch-up in aid and other development finance flows is now necessary if poverty is to be substantially reduced by 2015.

show abstract

Section: Aid Effectiveness: a Brief Surveymentioning

confidence: 99%

Development assistance and development finance: evidence and global policy agendas

Addison

Mavrotas

McGillivray

2005

J of Intl Development

View full text Add to dashboard Cite

show abstract

“…The second approach looks at fiscal response more broadly, specifically incorporating revenue into the utility function (if fungibility studies include revenue, it tends to be as a residual). McGillivray and 1 Fungibility studies model the actual extent to which aid is used for purposes other than those intended by donors, see Feyzioglu et al (1998), Swaroop et al (2000), Pack (1990, 1993). Such studies are the only examples of the impact of aid on government spending behaviour cited as evidence in World Bank (1998).…”

Section: Fiscal Response Modellingmentioning

confidence: 99%

Modelling the Fiscal Effects of Aid: An Impulse Response Analysis for Ghana

2003

View full text Add to dashboard Cite

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AcknowledgementsThis is a substantially revised version of a paper prepared for a workshop session in the 'Public Choice and Development' series at HWWA, Hamburg 14 November 2001. We are grateful to Henrik Hansen, Finn Tarp and workshop participants for useful comments on the earlier draft. ____________________________________________________________ July 2003Modelling the Fiscal Effects of Aid: An Impulse Response Analysis for Ghana by Robert Osei, Oliver Morrissey and Tim Lloyd AbstractAn important feature of aid to developing countries is that it is given to the government. As a result, aid should be expected to affect fiscal behaviour. Traditional approaches to modelling fiscal effects are beset by theoretical and empirical problems. This paper applies techniques developed in the 'macroeconometrics' literature to estimate the dynamic linkages between aid and fiscal aggregates. Vector autoregressive methods are applied to 34 years of annual data in Ghana to model the effect of aid on fiscal behaviour. Results suggest that aid to Ghana has been associated with reduced domestic borrowing and increased tax effort, combining to increase public spending. The paper provides evidence that aid has been associated with improved fiscal performance in Ghana, implying that the aid has been used sensibly (at least in fiscal terms).

show abstract

“…3 In reality, donors have many motives for giving foreign aid, and self-interest also plays a major role. 4 Often, for all intents and purposes, aid is fungible (see Boone, 1996;Swaroop et al, 2000).…”

Section: The Modelmentioning

confidence: 99%

“…The first term on the right-hand-side of (9) is the direct effect of the relaxation ofB , which must reduce the interest rate r. Turning to the effects of an increase in T , we note the following regarding the three terms in the coefficient of dT in (9). First, a rise in T increases the utility of the recipient and thus the level of private consumption in period 1.…”

Section: Substitutability Between Loans and Foreign Aidmentioning

confidence: 99%

On the substitutability between foreign aid and international credit

2013

View full text Add to dashboard Cite

We examine the effect of relaxing a binding borrowing constraint for a recipient country on the amount of foreign aid it receives. We do so by developing a two-country, two-period trade-theoretic model. The relaxation of the borrowing constraint reduces the flow of foreign aid, suggesting that the donor views developing nations' access to international credit markets as a substitute for foreign aid.

show abstract

Fiscal effects of foreign aid in a federal system of governance

Cited by 113 publications

References 10 publications

Development assistance and development finance: evidence and global policy agendas

Development assistance and development finance: evidence and global policy agendas

Modelling the Fiscal Effects of Aid: An Impulse Response Analysis for Ghana

On the substitutability between foreign aid and international credit

Contact Info

Product

Resources

About