Aid, Spending Strategies and Productivity Effects – A Multi-sectoral CGE Analysis for Zambia
AbstractNumerous econometric studies fail to detect a signicant and robust relationship between international aid and economic growth in the recipient countries. Dutch Disease effects might be responsible for this result.This paper examines the relation between aid and its effectiveness in a multi-sector multihousehold Computable General Equilibrium (CGE)-framework. Given that international transfers to African countries increasingly take the form of general financial support to the government, different spending strategies and their macroeconomic, sectoral and distributional effects are evaluated in a two-stage simulation making a distinction between immediate direct effects and possible long-run effects from increased productivity. While the model simulates the effects of additional aid in Zambia it can be used as a blueprint for other African countries.
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Bibliographic InfoPaper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0127.
Length: 33 pages
Date of creation: Jul 2009
Date of revision:
Other versions of this item:
- Clausen, Volker & Schürenberg-Frosch, Hannah, 2012. "Aid, spending strategies and productivity effects: A multi-sectoral CGE analysis for Zambia," Economic Modelling, Elsevier, vol. 29(6), pages 2254-2268.
- O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
- O55 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Africa
- F35 - International Economics - - International Finance - - - Foreign Aid
This paper has been announced in the following NEP Reports:
- NEP-AFR-2009-08-22 (Africa)
- NEP-ALL-2009-08-22 (All new papers)
- NEP-CMP-2009-08-22 (Computational Economics)
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