Aid and Public Sector Behavior in Developing Countries
AbstractThis paper analyzes developing-country public-sector fiscal behavior. It is concerned specifically with how aid inflows affect various categories of revenue and expenditure. An econometric model is developed, which differs from those used in previous studies by allowing domestic borrowing to finance both capital and recurrent expenditure. Structural and reduced-form equations are derived and estimated using 1956-95 time-series data for Pakistan. Results indicate that aid is allocated mainly to investment, is positively associated with both investment and consumption expenditure, and has no final impact on taxation. Copyright 2000 by Blackwell Publishing Ltd
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of Development Economics.
Volume (Year): 4 (2000)
Issue (Month): 2 (June)
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1363-6669
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- Rabia Butt & Attiya Yasmin Javid, 2013. "Foreign Aid and the Fiscal Behaviour of Government of Pakistan," PIDE-Working Papers 2013:96, Pakistan Institute of Development Economics.
- Fuentes, Raúl, 2005. "Aid, Policies and Growth: A Non-Canonical Alternative for solving This Puzzle," Proceedings of the German Development Economics Conference, Kiel 2005 14, Verein für Socialpolitik, Research Committee Development Economics.
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