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The Effect of Development Aid Unpredictability and Migrants' Remittances on Fiscal Consolidation in Developing Countries

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  • Sèna Kimm Gnangnon

    (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)

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    Abstract

    We 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 Info

    Paper provided by HAL in its series Working Papers with number halshs-00677108.

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    Date of creation: 07 Mar 2012
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    Handle: RePEc:hal:wpaper:halshs-00677108

    Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00677108
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    Related research

    Keywords: Remittances; Aid Unpredictability; Fiscal consolidation;

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