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Analysis Of Deviations And Delays In Aid Disbursements

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  • Matthew Odedokun

    (World Institute for Development Economics Research)

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    Abstract

    The study seeks to identify donor-specific factors that cause donors to delay aid disbursement, and to apply a double standard in dealing with the non-compliance of a recipient with regard to aid conditionalities, a practice that promotes uncertainty in the receipt of aid. Annual panel data over 1970-2000 for the 22 members of OECD¡¯s DAC donor group are employed in the empirical study. Our findings suggest that the proportion of pledged aid being disbursed, which shows an increasing trend, is positively affected by the extent to which aid is procurement-tied and by the size of the donor government¡¯s expenditure in relation to GDP. On the other hand, the proportion of aid commitments being disbursed, which appears lower for the G7 countries, is negatively influenced by factors such as abundant donor generosity, the predominance of grants in total aid, the specific targeting of aid to lower-income recipients, high growth in donor economy, as well as high level of checks and balances, and polarization between the executive and legislative branches of government in the donor country.

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    File URL: http://www.jed.or.kr/full-text/28-1/Odedokun.PDF
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    Bibliographic Info

    Article provided by Chung-Ang Unviersity, Department of Economics in its journal Journal Of Economic Development.

    Volume (Year): 28 (2003)
    Issue (Month): 1 (June)
    Pages: 137-169

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    Handle: RePEc:jed:journl:v:28:y:2003:i:1:p:137-169

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    Related research

    Keywords: Aid Disbursement; Aid Commitment; Donors; Recipients; Conditionality; Instability; Uncertainty;

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    1. A. K. Fosu, 2001. "Economic Fluctuations and Growth in Sub-Saharan Africa: The Importance of Import Instability," Journal of Development Studies, Taylor & Francis Journals, vol. 37(3), pages 71-85.
    2. Charette, Michael F., 1985. "Determinants of export instability in the primary commodity trade of LDC's," Journal of Development Economics, Elsevier, vol. 18(1), pages 13-21.
    3. Robert Lensink & Oliver Morrissey, 2000. "Aid instability as a measure of uncertainty and the positive impact of aid on growth," Journal of Development Studies, Taylor & Francis Journals, vol. 36(3), pages 31-49.
    4. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
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    Cited by:
    1. Arndt, Channing & Jones, Sam & Tarp, Finn, 2013. "Assessing Foreign Aid.s Long-Run Contribution to Growth in Development," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
    2. Ruth Vargas Hill, 2005. "Assessing rhetoric and reality in the predictability of aid," Human Development Occasional Papers (1992-2007) HDOCPA-2005-25, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    3. Robert K. Fleck & Christopher Kilby, 2009. "Changing Aid Regimes? U.S. Foreign Aid from the Cold War to the War on Terror," Villanova School of Business Department of Economics and Statistics Working Paper Series 1, Villanova School of Business Department of Economics and Statistics.
    4. Sèna Kimm Gnangnon, 2012. "The Effect of Development Aid Unpredictability and Migrants' Remittances on Fiscal Consolidation in Developing Countries," Working Papers halshs-00677108, HAL.

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