16 Aid and Fiscal Management
Author:
Ales Bulir
Search for other papers by Ales Bulir in
Current site
Google Scholar Close
Language:
English
Print Publication Date:
17 Sep 2004
Keywords:
BOOK; country; user payment; per capita income; francophone country; recipient country; exchange rate; hazard function; Health care spending; Africa; Western Hemisphere; Sub-Saharan Africa; Global; Asia and Pacific; donor country; aid dependency; recipient country authorities; expenditure side; Real exchange rates; a number of country

Abstract

Foreign aid has dwindled in the budgets of many donor countries during the past several years, but it continues to loom very large for many of the recipients.1 In many developing countries, foreign aid receipts are an important source of revenue and thus a key element in fiscal policy. Where domestic resources are very limited, aid may be an indispensable source of financing, in particular for expenditures in areas such as health, education, and public investment that are essential to raise the living standards of poor people in developing countries.

Other IMF Content

Other Publishers Content

  • Collapse
  • Expand
Cover Helping Countries Develop
Helping Countries Develop
The Role of Fiscal Policy
ISBN:
9781589063181
Publication Date:
17 Sep 2004
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781589063181.071
Pages:
540
Front Matter
1 Fiscal Policy for Economic Development: An Overview
I Macroeconomic Policy in Developing Countries
II Public Spending and the Millennium Development Goals
III Revenues and Growth
IV. Fiscal Policy and Aid
V. Special Topics

  • Adam, Chris, and others, 1994, Evaluation of Swedish Development Co-Operation with Tanzania: A Report for the Secretariat for Analysis of Swedish Development Assistance (Stockholm: Secretariat for Analysis of Swedish Development Assistance, Ministry for Foreign Affairs).

    • Search Google Scholar
    • Export Citation

  • Ajayi, S. Ibi, 2001, “What Africa Needs to Do to Benefit from Globalization,” Finance & Development, Vol. 38 (December), pp. 6-8.

  • Alesina, Alberto, and David Dollar, 2000, “Who Gives Foreign Aid to Whom and Why?” Journal of Economic Growth, Vol. 5 (March), pp. 33-63.

    • Search Google Scholar
    • Export Citation

  • Alesina, Alberto, and Beatrice Weder, 2002, “Do Corrupt Governments Receive Less Foreign Aid?” American Economic Review, Vol. 92 (September), pp. 1126-37.

    • Search Google Scholar
    • Export Citation

  • Atingi-Ego, Michael, and Rachel Kaggwa Sebudde, 2000, “Uganda’s Equilibrium Real Exchange Rate and Its Implications for Non-Traditional Export Performance,” Bank of Uganda Staff Papers, Vol. 2, No. 1, pp. 1-43.

    • Search Google Scholar
    • Export Citation

  • Barrett, Christopher B., 2001, “Does Food Aid Stabilize Food Stability?” Economic Development and Cultural Change, Vol. 49 (January), pp. 335-49.

    • Search Google Scholar
    • Export Citation

  • Barro, Robert J., and Xavier Sala-ì-Martin, 1995, Economic Growth (Cambridge, Massachusetts: MIT Press).

  • Basu, Anupam, and Krishna Srinivasan, 2002, “Foreign Direct Investment in Africa—Some Case Studies,” IMF Working Paper 02/61 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Bauer, Peter T., 1979, “Foreign Aid Viewed Differently,” Aussenwirtschaft, Vol. 34 (September), pp. 225-39.

  • Beaugrand, Philippe, Boileau Loko, and Montfort Mlachila, 2002, “The Choice Between External and Domestic Debt in Financing Budget Deficits: The Case of Central and West African Countries,” IMF Working Paper 02/79 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Bulíř, Aleš, and A. Javier Hamann, 2003, “Aid Volatility: An Empirical Assessment,” IMF Staff Papers, Vol. 50, No. 1, pp. 64-89.

  • Bulíř, Aleš, and Soojin Moon, 2003, “Do IMF-Supported Programs Help Make Fiscal Adjustment More Durable?” IMF Working Paper 03/38 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Bulow, Jeremy, and Paul Klemperer, 1999, “The Generalized War of Attrition,” American Economic Review, Vol. 89 (March), pp. 175-89.

  • Burnside, Craig, and David Dollar, 2000, “Aid, Policies, and Growth,” American Economic Review, Vol. 90 (September), pp. 847-68.

  • Casella, Alessandra, and Barry Eichengreen, 1996, “Can Foreign Aid Accelerate Stabilisation?” Economic Journal, Vol. 106 (May), pp. 605-19.

    • Search Google Scholar
    • Export Citation

  • Collier, Paul, 1999, “Aid ‘Dependency’: A Critique,” Journal of African Economies, Vol. 8 (December), pp. 528-45.

  • Collier, Paul,, 2000, “Africa’s Comparative Advantage,” in Industrial Development and Policy in Africa: Issues of De-Industrialization and Development Strategy, ed. by Hossein Jalilian, Michael Tribe, and John Weiss (Cheltenham, United Kingdom: Edward Elgar), pp. 11-21.

    • Search Google Scholar
    • Export Citation

  • Collier, Paul, and Jan Dehn, 2001, “Aid, Shocks, and Growth,” World Bank Policy Research Working Paper No. 2688 (Washington: World Bank).

    • Search Google Scholar
    • Export Citation

  • Dalgaard, Carl-Johan, and Hendrik Hansen, 2001, “On Aid, Growth, and Good Policies,” Journal of Development Studies, Vol. 37 (August), pp. 17-41.

    • Search Google Scholar
    • Export Citation

  • Dijkstra, A. Geske, and Jan Kees van Donge, 2001, “What Does the ‘Show Case’ Show? Evidence of and Lessons from Adjustment in Uganda,” World Development, Vol. 29 (May), pp. 841-63.

    • Search Google Scholar
    • Export Citation

  • Durbarry, Ramesh, Norman Gemmell, and David Greenaway, 1998, “New Evidence on the Impact of Foreign Aid on Economic Growth,” CREDIT Research Paper, No. 98/8 (University of Nottingham: Centre for Research in Economic Development and International Trade).

    • Search Google Scholar
    • Export Citation

  • Easterly, William, 2001, “The Lost Decades: Developing Countries’ Stagnation in Spite of Policy Reform 1980-1998,” Journal of Economic Growth, Vol. 6 (June), pp. 135-57.

    • Search Google Scholar
    • Export Citation

  • Easterly, William,, 2002, “The Cartel of Good Intentions: The Problem of Bureaucracy in Foreign Aid,” Journal of Policy Reform, Vol. 5 (December), pp. 223-50.

    • Search Google Scholar
    • Export Citation

  • Edwards, Sebastian, and Sweder van Wijnbergen, 1989, “Disequilibrium and Structural Adjustment,” Chapter 28 in Handbook of Development Economics, Vol. II, ed. by H. Chenery and T.N. Srinivasan (New York: North-Holland).

    • Search Google Scholar
    • Export Citation

  • Elbadawi, Ibrahim A., 1998, “Can Africa Export Manufactures? The Role of Endowment, Exchange Rates, and Transaction Costs,” World Bank Policy Research Working Paper No. 2120 (Washington: World Bank).

    • Search Google Scholar
    • Export Citation

  • Elbadawi, Ibrahim A.,, 1999, “External Aid: Help or Hindrance to Export Orientation in Africa?” Journal of African Economies, Vol. 8 (December), pp. 578-616.

    • Search Google Scholar
    • Export Citation

  • Ensminger, Jean, 1997, “Changing Property Rights: Reconciling Formal and Informal Rights to Land in Africa,” in The Frontiers of the New Institutional Economics, ed. by John N. Droback and John VC. Nye (San Diego, California: Academic Press), pp. 165-96.

    • Search Google Scholar
    • Export Citation

  • Falck, Hans, 2000, “Mozambique: Dutch Disease in Mozambique?” SIDA Country Economic Report 2000:1 (Stockholm, Sweden: Swedish International Development Cooperation Agency).

    • Search Google Scholar
    • Export Citation

  • Fanizza, Domenico, 2001, “Foreign Aid, Macroeconomic Stabilization, and Growth in Malawi,” in Malawi—Selected Issues and Statistical Appendix, IMF Country Report No. 01/32 (Washington: International Monetary Fund), pp. 11-30.

    • Search Google Scholar
    • Export Citation

  • Frait, Jan, and Luboš Komárek, 1999, “Dlouhodobý rovnovážný reálný měnový kurz koruny a jeho determinanty” (Long-Term Equilibrium Real Exchange Rate of the Koruna and Its Determinants), Working Paper No. 9-99 (Prague: Czech National Bank). Available via the Internet: http://www.cnb.cz/pdf/c-vp9-99.pdf.

    • Search Google Scholar
    • Export Citation

  • Gemmell, Norman, and Mark McGillivray, 1998, “Aid and Tax Instability and the Government Budget Constraint in Developing Countries,” CREDIT Research Paper No. 98/1 (University of Nottingham: Centre for Research in Economic Development and International Trade).

    • Search Google Scholar
    • Export Citation

  • Guillaumont, Patrick, and Lisa Chauvet, 2001, “Aid and Performance: A Reassessment,” Journal of Development Studies, Vol. 37 (August), pp. 66-92.

    • Search Google Scholar
    • Export Citation

  • Gunning, Jan W., 2000, “Rethinking Aid,” paper presented at the 12th Annual Bank Conference on Development Economics (Washington: World Bank). Available via the Internet: http://www.worldbank.org/research/abcde/washington_12/pdf_files/gunning.pdf.

    • Search Google Scholar
    • Export Citation

  • Hadjimichael, Michael T., and others, 1995, Sub-Saharan Africa: Growth, Savings, and Investment, 1986-93, IMF Occasional Paper No. 118 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Hansen, Henrik, and Finn Tarp, 2001a, “Aid and Growth Regressions,” Journal of Development Economics, Vol. 64 (April), pp. 547-70.

  • Hansen, Henrik, and Finn Tarp,, 2001b, “Aid Effectiveness Disputed,” Journal of International Development, Vol. 12, pp. 375-98.

  • Heller, Peter S., 1975, “A Model of Public Fiscal Behavior in Developing Countries: Aid, Investment, and Taxation,” American Economic Review, Vol. 65 (June), pp. 429-45.

    • Search Google Scholar
    • Export Citation

  • Hjertholm, Peter, Jytte Laursen, and Howard White, 2000, “Macroeconomic Issues in Foreign Aid,” University of Copenhagen, Institute of Economics Discussion Paper No. 00/05 (Copenhagen: University of Copenhagen).

    • Search Google Scholar
    • Export Citation

  • International Monetary Fund, 2001a, “Conditionality in IMF-Supported Program—Policy Issues” (Washington: International Monetary Fund). Available via the Internet: http://www.imf.org/external/np/pdr/cond/2001/eng/policy/021601.pdf.

    • Search Google Scholar
    • Export Citation

  • International Monetary Fund, 2001b, “Streamlining Structural Conditionality: Review of Initial Experience” (Washington: International Monetary Fund). Available via the Internet: http://www.imf.org/external/np/pdr/cond/2001/eng/collab/review.htm.

    • Search Google Scholar
    • Export Citation

  • International Monetary Fund, 2002, “The Modalities of Conditionality—Further Considerations” (Washington: International Monetary Fund). Available via the Internet: http://www.imf.org/external/np/pdr/cond/2002/eng/modal/010802.htm.

    • Search Google Scholar
    • Export Citation

  • Khan, Mohsin S., and Sunil Sharma, 2001, “IMF Conditionality and Country Ownership of Programs,” IMF Working Paper 01/142 (Washington: International Monetary Fund).

    • Search Google Scholar
    • Export Citation

  • Lancaster, Carol, 1999, “Aid Effectiveness in Africa: The Unfinished Agenda,” Journal of African Economies, Vol. 8, pp. 487-503.

  • Laplagne, Patrick, 1997, “Dutch Disease in the South Pacific: Evidence from the 1980s and Beyond,” Pacific Economic Bulletin, Vol. 12 (June), pp. 84-96.

    • Search Google Scholar
    • Export Citation

  • Laplagne, Patrick, Malcolm Treadgold, and Jonathan Baldry, 2001, “A Model of Aid Impact in Some South Pacific Microstates,” World Development, Vol. 29 (February), pp. 365-83.

    • Search Google Scholar
    • Export Citation

  • Lensink, Robert, and Oliver Morrissey, 2000, “Aid Instability as a Measure of Uncertainty and the Positive Impact of Aid on Growth,” Journal of Development Studies, Vol. 36 (February), pp. 31-49.

    • Search Google Scholar
    • Export Citation

  • Lensink, Robert, and Howard White, 1999, “Is There an Aid Laffer Curve?” CREDIT Research Paper No. 99/6 (University of Nottingham: Centre for Research in Economic Development and International Trade).

    • Search Google Scholar
    • Export Citation

  • Lensink, Robert, and Howard White,, 2000, “Assessing Aid: A Manifesto for Aid in the 21st Century?” Oxford Development Studies, Vol. 28 (February), pp. 6-17.

    • Search Google Scholar
    • Export Citation

  • Lucas, Robert, 1988, “On the Mechanics of Economic Development,” Journal of Monetary Economics, Vol. 22 (July), pp. 3-42.

  • McGillivray, Mark, and Oliver Morrissey, 2001a, “Aid Illusion and Public Sector Fiscal Behaviour,” Journal of Development Studies, Vol. 37 (August), pp. 118-36.

    • Search Google Scholar
    • Export Citation

  • McGillivray, Mark, and Oliver Morrissey,, 2001b, “A Review of Evidence on the Fiscal Effects of Aid,” CREDIT Research Paper No. 01/13 (University of Nottingham: Centre for Research in Economic Development and International Trade).

    • Search Google Scholar
    • Export Citation

  • Michaely, Michael, 1981, “Foreign Aid, Economic Structure, and Dependence,” Journal of Development Economics, Vol. 9 (December), pp. 313-30.

    • Search Google Scholar
    • Export Citation

  • Nyoni, Timothy S., 1998, “Foreign Aid and Economic Performance in Tanzania,” World Development, Vol. 26 (July), pp. 1235-40.

  • Pallage, Stéphane, and Michel A. Robe, 2001, “Foreign Aid and the Business Cycle,” Review of International Economics, Vol. 9 (November), pp. 636-67.

    • Search Google Scholar
    • Export Citation

  • Pallage, Stéphane, and Michel A. Robe,, 2003, “On the Welfare Cost of Economic Fluctuations in Developing Countries,” International Economic Review, Vol. 44 (May), pp. 677-98.

    • Search Google Scholar
    • Export Citation

  • Reinikka, Ritva, and Jakob Svensson, 2002, “Explaining Leakage of Public Funds,” CEPR Discussion Paper Series No. 3227 (London: Centre for Economic Policy Research).

    • Search Google Scholar
    • Export Citation

  • Romer, Paul M., 1986, “Increasing Returns and Long-Run Growth,” Journal of Political Economy, Vol. 94 (October), pp. 1002-37.

  • Sekkat, Khalid, and Aristomene Varoudakis, 2000, “Exchange Rate Management and Manufactured Exports in Sub-Saharan Africa,” Journal of Development Economics, Vol. 61 (February), pp. 237-53.

    • Search Google Scholar
    • Export Citation

  • Söderling, Ludvig, 2000, “Dynamics of Export Performance, Productivity and Real Effective Exchange Rate in Manufacturing: The Case of Cameroon,” Journal of African Economies, Vol. 9 (December), pp. 411-29.

    • Search Google Scholar
    • Export Citation

  • Stolper, Wolfgang E, and Paul A. Samuelson, 1941, “Protection and Real Wages,” Review of Economic Studies, Vol. 9 (November), pp. 58-73. Reprinted in Comparative Politics and the International Political Economy, Vol. 1 (Aldershot, United Kingdom: Elgar, 1995), pp. 255-70.

    • Search Google Scholar
    • Export Citation

  • Svensson, Jakob, 2000, “When Is Foreign Aid Policy Credible: Aid Dependence and Conditionality,” Journal of Development Economics, Vol. 61 (February), pp. 61-84.

    • Search Google Scholar
    • Export Citation

  • Teal, Francis, 1999, “Why Can Mauritius Export Manufactures and Ghana Not?” World Economy, Vol. 7 (September), pp. 981-93.

  • Tornell, Aaron, and Philip R. Lane, 1999, “The Voracity Effect,” American Economic Review, Vol. 89 (March), pp. 22-46.

  • van Wijnbergen, Sweder, 1986, “Macroeconomic Aspects of the Effectiveness of Foreign Aid: On the Two-Gap Model, Home Goods Disequilibrium and Real Exchange Rate Misalignment,” Journal of International Economics, Vol. 21 (August), pp. 123-36.

    • Search Google Scholar
    • Export Citation

  • Vos, Rob, 1998, “Aid Flows and ‘Dutch Disease’ in a General Equilibrium Framework for Pakistan,” Journal of Policy Modeling, Vol. 20 (February), pp. 77-109.

    • Search Google Scholar
    • Export Citation

  • White, Howard, 1992, “The Macroeconomic Impact of Development Aid: A Critical Survey,” Journal of Development Studies, Vol. 28 (January), pp. 163-240.

    • Search Google Scholar
    • Export Citation

  • World Bank, 2002,Global Development Finance (Washington: World Bank).

  • Younger, Stephen D., 1992, “Aid and the Dutch Disease: Macroeconomic Management When Everybody Loves You,” World Development, Vol. 20 (November), pp. 1587-97.

    • Search Google Scholar
    • Export Citation