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Foreign Aid and the Question of Fungibility

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Author Info
Pack, Howard
Pack, Janet Rothenberg
Abstract

This paper analyzes whether the foreign assistance provided for specific categories of expenditure is shifted among them, contrary to the wishes of donors. It also considers whether aid reduces the tax effort of recipient governments. Econometric results are presented for the Dominican Republic that show that the fungibility of aid has resulted in a thwarting of the intentions of donors. An attempt is made to account for the observed differences in behavior of individual countries in altering expenditures. Copyright 1993 by MIT Press.

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Publisher Info
Article provided by MIT Press in its journal Review of Economics & Statistics.

Volume (Year): 75 (1993)
Issue (Month): 2 (May)
Pages: 258-65
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Handle: RePEc:tpr:restat:v:75:y:1993:i:2:p:258-65

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  1. van de Walle, Dominique & Cratty, Dorothyjean, 2005. "Do donors get what they paid for? micro evidence on the fungibility of development project aid," Policy Research Working Paper Series 3542, The World Bank. [Downloadable!]
  2. Ira N. Gang & Gil S. Epstein, 2002. "Government and Cities: Contests and the Decentralization of Decision Making," Departmental Working Papers 200215, Rutgers University, Department of Economics. [Downloadable!]
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  3. Haider A. Khan, 2005. "Governance and Effectiveness of Japanese Aid: Towards Optimality," CIRJE F-Series CIRJE-F-331, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
  4. Haider Khan, 2002. "Japanese Foreign Aid, Development Expenditures and Taxation in Thailand: Econometric Results from a Bounded Rationality Model of Fiscal Behavior," CIRJE F-Series CIRJE-F-188, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
  5. Peter Boone, 1995. "Politics and the Effectiveness of Foreign Aid," NBER Working Papers 5308, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Ira N. Gang & Haider Ali Khan, 1998. "Foreign Aid and Fiscal Behavior in a Bounded Rathionality Model: Different Policy Regimes," Departmental Working Papers 199812, Rutgers University, Department of Economics. [Downloadable!]
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  7. Peter Hjertholm & Jytte Laursen & Howard White, 2000. "Macroeconomic Issues in Foreign Aid," Discussion Papers 00-05, University of Copenhagen. Department of Economics (formerly Institute of Economics). [Downloadable!]
  8. Haider A. Khan, 2003. "The Future of Japanese Aid to South and Southeast Asia: A Comparative Analysis," CIRJE F-Series CIRJE-F-233, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
  9. Devarajan, Shantayanan & Rajkumar, Andrew Sunil & Swaroop, Vinaya, 1999. "What does aid to Africa finance?," Policy Research Working Paper Series 2092, The World Bank. [Downloadable!]
  10. Feyzioglu, Tarhan & Swaroop, Vinaya & Min Zhu, 1996. "Foreign aid's impact on public spending," Policy Research Working Paper Series 1610, The World Bank. [Downloadable!]
  11. Hans-Rimbert Hemmer & Andreas Lorenz, 2003. "What determines the success or failure of german bilateral financial aid?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 127(3), pages 507-549, September. [Downloadable!] (restricted)
  12. Gil S. Epstein & Ira N Gang, 2006. "The Hope for Hysteresis in Foreign Aid," Departmental Working Papers 200628, Rutgers University, Department of Economics. [Downloadable!]
  13. Zafar Iqbal, 1997. "Foreign Aid and the Public Sector: A Model of Fiscal Behaviour in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 36(2), pages 115-129. [Downloadable!]
  14. Devarajan, Shantayanan & Swaroop, vinaya, 1998. "The implications of foreign aid fungibility for development assistance," Policy Research Working Paper Series 2022, The World Bank. [Downloadable!]
  15. Santanu Chatterjee & Paola Giuliano & Ilker Kaya, 2007. "Where Has All the Money Gone? Foreign Aid and the Quest for Growth," IZA Discussion Papers 2858, Institute for the Study of Labor (IZA). [Downloadable!]
  16. van de Walle, Dominique & Ren Mu, 2007. "Fungibility and the flypaper effect of project aid : micro-evidence for Vietnam," Policy Research Working Paper Series 4133, The World Bank. [Downloadable!]
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  17. Neva Novarro, 2004. "Do Policy-Makers Earmark to Constrain their Successors? The Case of Environmental Earmarking," Working Papers 0408, College of the Holy Cross, Department of Economics. [Downloadable!]
  18. Haider Ali Khan, 2002. "How Effective Is Japanese Foreign Aid? Econometric Results from a Bounded Rationality Model for Indonesia," CIRJE F-Series CIRJE-F-164, CIRJE, Faculty of Economics, University of Tokyo. [Downloadable!]
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