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Aid and Fiscal Behaviour in Developing Asia

In: Development, Governance and the Environment in South Asia

Author

Listed:
  • Akhter Ahmed

Abstract

Many lofty expectations surrounded the role and impact of development aid in the early days of its provision. According to the protagonists of aid many developing countries could not grow at sufficiently rapid, eventually self-sustaining, rates required to modernise their economies. Of course, there were many early critics, who saw aid as a way of keeping poor countries poor and dependent upon their much richer, western counterparts. This group was as adamant of the negative effects of aid as the proponents of its positive effects. Applied research on the macroeconomic impact of aid has contributed little to this debate, to the extent that the relevant literature fails to settle the issue either way. The present study argues that the exiting literature’s theoretical underpinnings are at best vague and at worst non-existent, data sets are too aggregate and statistical methods too primitive. Yet even more serious is that the literature (with one important exception of Heller 1975) has all too often ignored the precise process or channels through which aid affects such macroeconomic variables such as income and growth.

Suggested Citation

  • Akhter Ahmed, 1999. "Aid and Fiscal Behaviour in Developing Asia," Palgrave Macmillan Books, in: Mohammad Alauddin & Samiul Hasan (ed.), Development, Governance and the Environment in South Asia, chapter 8, pages 141-159, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-349-27631-8_8
    DOI: 10.1007/978-1-349-27631-8_8
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    Citations

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    Cited by:

    1. 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.
    2. Ouattara, B., 2006. "Foreign aid and government fiscal behaviour in developing countries: Panel data evidence," Economic Modelling, Elsevier, vol. 23(3), pages 506-514, May.
    3. Bazoumana Ouattara, 2007. "Foreign Aid, Public Savings Displacement and Aid Dependency in Cote d'Ivoire: An Aid Disaggregation Approach," Oxford Development Studies, Taylor & Francis Journals, vol. 35(1), pages 33-46.
    4. Bazoumana Ouattara, 2006. "Aid, debt and fiscal policies in Senegal," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(8), pages 1105-1122.
    5. B Ouattara, 2004. "Does Aid Promote Fiscal Indiscipline? Evidence from Dynamic Panel Model," Economics Discussion Paper Series 0407, Economics, The University of Manchester.
    6. 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.

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