Constraints to Achieving the MDGs with Scaled-Up Aid
AbstractThis paper examines the macroeconomic and structural constraints to scaling up aid flows to developing countries to meet the Millennium Development Goals in 2015, including infrastructure, competitiveness and the real exchange rate, labour markets, fiscal constraints, governance, and aid volatility and fragmentation. The impact of these constraints on cost-efficient sequencing and composition of scaled-up aid flows is considered, using a dynamic computable general equilibrium model applied to Ethiopia. The main conclusions are that: (i) accelerating growth through productivity-enhancing infrastructure investment (and improved governance) is key to achieving the MDGs; (ii) large increases in aid risk undermining competitiveness and future growth; and (iii) skilled labour constraints require careful aid sequencing that limit the scope for frontloading.
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Bibliographic InfoPaper provided by United Nations, Department of Economics and Social Affairs in its series Working Papers with number 15.
Length: 26 pages
Date of creation: Mar 2006
Date of revision:
Millennium Development Goals (MDGs); aid effectiveness; scaling up aid; absorptive capacity.;
Find related papers by JEL classification:
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- O21 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy
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