Aid Unpredictability and Economic Growth
AbstractIn this paper, we examine the influence of unpredictable aid on a recipient’s economic growth. If aid amounts vary by year and the changes are unpredictable, we expect that this “unpredictability” decreases aid’s growth-enhancing effect. This naturally raises the questions: How large is the influence of aid “unpredictability” on a recipient’s economic growth? Does “unpredictability” significantly damage aid’s growth-enhancing effect? Our research shows that the impact is significant; in a typical case, one fifth of aid is wasted due to “unpredictability.” Further, it is possible that in some cases, the aid may be wasted by as much as one third.
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Bibliographic InfoArticle provided by Elsevier in its journal World Development.
Volume (Year): 40 (2012)
Issue (Month): 2 ()
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Web page: http://www.elsevier.com/locate/worlddev
aid; economic growth; predictability; low-income countries;
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