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Anticipated Development Assistance, Temporary Relief Aid, and

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  • Levy, Victor

Abstract

Much debate about the effectiveness of foreign aid to developing countries focuses on the assumption that aid flows mainly enhance current consumption rather than being channeled into investment. This paper seeks to establish what proportion of foreign assistance is used to finance current consumption. The principal hypothesis to be tested is that aid transfers include very heterogeneous components with different marginal propensities to raise consumption. Estimating the average marginal propensity to consume of all the components of aid, as is commonly done, may lead to erroneous results. Copyright 1987 by Royal Economic Society.

Suggested Citation

  • Levy, Victor, 1987. "Anticipated Development Assistance, Temporary Relief Aid, and," Economic Journal, Royal Economic Society, vol. 97(386), pages 446-458, June.
    • Handle: RePEc:ecj:econjl:v:97:y:1987:i:386:p:446-58
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    Citations

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    Cited by:

    1. Boone, Peter, 1996. "Politics and the effectiveness of foreign aid," European Economic Review, Elsevier, vol. 40(2), pages 289-329, February.
    2. G Mavrotas & B Ouattara, 2003. "The Composition of Aid and the Fiscal Sector in an Aid-Recipient Economy: A model," Economics Discussion Paper Series 0307, Economics, The University of Manchester.
    3. Sergio Tezanos Vázquez, 2010. "Ayuda y crecimiento: una relación en disputa," Documentos de trabajo sobre cooperación y desarrollo 201001, Cátedra de Cooperación Internacional y con Iberoamérica (COIBA), Universidad de Cantabria.
    4. Peter Boone, 1995. "Politics and the Effectiveness of Foreign Aid," NBER Working Papers 5308, National Bureau of Economic Research, Inc.
    5. Feyzioglu, Tarhan & Swaroop, Vinaya & Min Zhu, 1996. "Foreign aid's impact on public spending," Policy Research Working Paper Series 1610, The World Bank.
    6. Liutang Gong & Heng-fu Zou, 2000. "Foreign Aid Reduces Domestic Capital Accumulation and Increases Foreign Borrowing: A Theoretical Analysis," Annals of Economics and Finance, Society for AEF, vol. 1(1), pages 147-163, May.
    7. George Mavrotas, 2003. "The International Finance Facility: The UK HM Treasury-DFID Proposal to Increase External Finance to Developing Countries," WIDER Working Paper Series DP2003-79, World Institute for Development Economic Research (UNU-WIDER).
    8. George Mavrotas, 2003. "Which Types of Aid Have the Most Impact?," WIDER Working Paper Series DP2003-85, World Institute for Development Economic Research (UNU-WIDER).
    9. George Mavrotas & Peter Nunnenkamp, 2007. "Foreign Aid Heterogeneity: Issues and Agenda," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(4), pages 585-595, December.
    10. Agbonyitor, Albert D. K., 1998. "Development expenditures and the local financing constraint," Policy Research Working Paper Series 1907, The World Bank.
    11. George Mavrotas, 2005. "Aid heterogeneity: looking at aid effectiveness from a different angle," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(8), pages 1019-1036.
    12. George Mavrotas & Bazoumana Ouattara, 2003. "Aid Disaggregation, Endogenous Aid and the Public Sector in Aid-Recipient Economies: Evidence from Côte d'Ivoire," WIDER Working Paper Series DP2003-15, World Institute for Development Economic Research (UNU-WIDER).
    13. Ramesh Durbarry, 2004. "Foreign aid: is it all consumed?," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(2), pages 189-199.
    14. George Mavrotas, 2002. "Foreign aid and fiscal response: Does aid disaggregation matter?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(3), pages 534-559, September.
    15. White, Howard & Luttik, Joke & DEC, 1994. "The countrywide effects of aid," Policy Research Working Paper Series 1337, The World Bank.

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