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Business and Economics > Production and Operations Management

You are looking at 1 - 5 of 5 items for :

  • Type: Journal Issue x
  • Foreign aid x
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Cover IMF Working Papers
Business Cycle Fluctuations, Large Shocks, and Development Aid: New Evidence
Ms. Era Dabla-Norris
,
Ms. Camelia Minoiu
, and
Luis-Felipe Zanna
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.
Keywords:
WP; country; recipient country; aid outlay; donor output gap; recipient cycle
Cover IMF Working Papers
Foreign Aid and Real Exchange Rate Adjustments in a Financially Constrained Dependent Economy
Stephen J. Turnovsky
,
Serpil Tekin
, and
Ms. Valerie Cerra
A dynamic dependent-economy model is developed to investigate the role of the real exchange rate in determining the effects of foreign aid. If capital is perfectly mobile between sectors, untied aid has no longrun impact on the real exchange rate. A decline in the traded sector occurs because aid, being denominated in traded output, substitutes for exports in financing imports. While untied aid causes short-run real exchange appreciation, this response is very temporary and negligibly small. Tied aid, by influencing sectoral productivity, does generate permanent relative price effects. The analysis, which employs extensive numerical simulations, emphasizes the tradeoffs between real exchange adjustments, long-run capital accumulation, and economic welfare, associated with alternative forms of foreign aid.
Keywords:
WP; mover accent; capital stock
Cover Post-Stabilization Economics in Sub-Saharan Africa
Post-Stabilization Economics in Sub-Saharan Africa
Lessons from Mozambique
Mr. Shanaka J Peiris
and
Mr. Jean A. P. Clément

Abstract

Mozambique is an economic success story in sub-Saharan Africa (SSA). Its remarkable achievements offer valuable lessons to other low-income countries in a post-stabilization economic phase, including how they can efficiently manage a scaling up of foreign aid aimed at poverty reduction. Of special interest to other sub-Saharan countries are the book's discussions of Mozambique's progress toward consolidating macroeconomic and financial stability, and the challenges it faces in ensuring long-term sustainability, creating a virtuous cycle of natural resource use, and implementing second-generation structural reforms to sustain its growth. This book also provides a summary of the most recent research on issues related to post-stabilization economics in SSA.

Keywords:
BOOK; Mozambique; exchange rate; productivity; poverty; income; poverty reduction; monetary management; transmission mechanism; government implementation; crop income; Total factor productivity; Real exchange rates; Exports; Exchange rates; Sub-Saharan Africa; Africa; Southern Africa; East Asia; Asia and Pacific
Cover IMF Working Papers
Why Do Some Countries Manage to Extract Growth from Foreign Aid?
Jean-François Ruhashyankiko
Aid is primarily given to governments whereas the engine of sustained growth is the private sector. It is therefore illusory to investigate the impact of aid on growth without considering the impact of government interventions on the private sector. The model shows how these interventions improve capacity utilization and growth. However, distortionary interventions can also cause capacity underutilization and an increase in the informal economy, that is, the very market failures the interventions initially sought to address. Countries that fall into this trap are characterized by insufficient credibility in promoting the private sector, which translates into aid dependence and slower growth over time. The empirical evidence is supportive. This paper finds that aggregate aid has a positive impact on growth (even without diminishing returns) but the impact is substantially smaller for low-income countries.
Keywords:
WP; private sector
Cover IMF Working Papers
Export Orientation and Productivity in Sub-Saharan Africa
Ms. Catherine A Pattillo
and
Mr. Taye Mengistae
Analysis of firm-level panel data from three sub-Saharan African economies shows that exporting manufacturers have a total factor productivity premium of 11-28 percent. The data do not allow testing of whether these premiums are caused by selection of more efficient producers into exporting or by learning-by-exporting. By thinking about the mechanisms behind selectivity and learning, however, our finding of higher premiums for direct exporters and exporters to outside Africa could be interpreted as being consistent with learning-by-exporting effects. However, if learning-by-exporting is indeed present in the data, we cannot disentangle its effect on productivity from those of more traditionally recognized channels of international technology diffusion.
Keywords:
WP; productivity premium; firm age; firms export; Ethiopian firm; productivity equation; Exports; productivity; Africa; learning-by-exporting; direct exporter; Imports; Total factor productivity; Sub-Saharan Africa