How much foreign aid given to PNG has stayed within the sectors to which it has been allocated and how much has it allowed the PNG Government to free up its own resources for other spending priorities?
AbstractThis paper measures the extent to which donor finance has contributed to higher rates of spending in three key development sectors of the PNG economy—health, education and infrastructure between 1974 and 2008. Results show that high rates of fungibility have occurred within PNG during this time. The PNG Government has placed the least priority on additional rates of health spending and most priority on additional infrastructure spending, although all sectors have increased by only a fraction of the amount of aid given. The results also compare the impact of budget support vis-à-vis project and program aid to induce higher rates of spending in each of these sectors. A number of policy implications follow.
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Bibliographic InfoPaper provided by International and Development Economics in its series International and Development Economics Working Papers with number idec09-05.
Length: 31 pages
Date of creation: 2009
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