Business Cycle Fluctuations, Large Shocks, and Development Aid : New Evidence

Business Cycle Fluctuations, Large Shocks, and Development Aid : New Evidence
Get Code Buy
Journal Issue
Share
Volume/Issue:
2010/240
Series:
IMF Working Papers
Author(s):
Era Dabla-Norris, Camelia Minoiu, and Luis-Felipe Zanna
Publisher:
INTERNATIONAL MONETARY FUND
Published Date:
October 2010
DOI:
http://dx.doi.org/10.5089/9781455209408.001
ISBN:
9781455209408
ISSN:
1018-5941
Page:
39
We examine the cyclical properties of development aid using bilateral data for 22 donors and over 100 recipients during 1970?2005. We find that bilateral aid flows are on average procyclical with respect to business cycles in donor and recipient countries. However, they become countercyclical when recipient countries face large adverse shocks to the terms-of-trade or growth collapses-thus playing an important cushioning role. Aid outlays contract sharply during severe donor economic downturns; this effect is magnified by higher public debt levels. Additionally, bilateral aid flows are higher in the presence of IMF programs and are more countercyclical for recipient countries with stronger institutions.
Article

Business Cycle Fluctuations, Large Shocks, and Development Aid

Author(s):
Era Dabla-Norris, Camelia Minoiu, and Luis-Felipe Zanna
Published Date:
October 2010
    Share
    • ShareShare
    Show Summary Details
    You are not logged in and do not have access to this content. Please login or, to subscribe to IMF eLibrary, please click here

    Other Resources Citing This Publication

    look up citations for this publication in google scholar