The Effect of Development Aid Unpredictability and Migrants’ Remittances on Fiscal Consolidation in Developing Countries
AbstractWe use panel data on seventy-four developing countries for the period 1980–2007 to examine the effects of aid unpredictability and migrants’ remittances on fiscal consolidation in these countries. Two definitions of fiscal adjustment are considered and a conditional logit model is used to perform the analysis. Evidence is shown that except for the case of low-income countries, remittances increase the likelihood of fiscal consolidation, be the latter gradual or rapid. Surprisingly, we observe that aid unpredictability, except in SSA countries where the effect is strongly positive and significant, does not affect the adoption of fiscal consolidation measures in all the groups considered.
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Bibliographic InfoPaper provided by CERDI in its series Working Papers with number 201210.
Date of creation: 2012
Date of revision:
Remittances; Aid Unpredictability; Fiscal consolidation;
Find related papers by JEL classification:
- F20 - International Economics - - International Factor Movements and International Business - - - General
- C5 - Mathematical and Quantitative Methods - - Econometric Modeling
- O23 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
- F35 - International Economics - - International Finance - - - Foreign Aid
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