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Foreign Aid, Public Sector and Private Consumption: a Cointegrated Vector Autoregressive Approach

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  • Thomas Bwire
  • Oliver Morrissey
  • Tim Lloyd

Abstract

This paper employs a cointegrated vector autoregressive model to assess the growth effect of aid in Uganda over the period 1972-2008. Results show that aid in Uganda has had both direct and indirect beneficial association with growth; that it is the productivity and not the stead state level of investment that contributes to achieving target growth rates; and that consumption spending is more beneficial to growth because it contributes to private incomes and consumption.

Suggested Citation

  • Thomas Bwire & Oliver Morrissey & Tim Lloyd, 2013. "Foreign Aid, Public Sector and Private Consumption: a Cointegrated Vector Autoregressive Approach," WIDER Working Paper Series wp-2013-094, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2013-094
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    File URL: https://www.wider.unu.edu/sites/default/files/WP2013-094.pdf
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    References listed on IDEAS

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