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Consequences of Aid Volatility for Macroeconomic Management and Aid Effectiveness

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  • Hudson, John

Abstract

We conclude that individual aid sector volatility matters as well as total aid volatility. Easily, the most important contributor to total volatility is debt aid. The most volatile aid sectors per se include debt, industry, and humanitarian, and the least include education and health. In several sectors volatility appears to have peaked around 2006. Within individual countries, sector volatility is often corrected for in the following period, there are also sometimes knock-on effects on other sectors. Finally we examine the impact of sector aid, and aid volatility, on school completion rates, death rates, Internet usage, and mobile phone subscriptions.

Suggested Citation

  • Hudson, John, 2015. "Consequences of Aid Volatility for Macroeconomic Management and Aid Effectiveness," World Development, Elsevier, vol. 69(C), pages 62-74.
  • Handle: RePEc:eee:wdevel:v:69:y:2015:i:c:p:62-74
    DOI: 10.1016/j.worlddev.2013.12.010
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    Citations

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    Cited by:

    1. Guillaumont, Patrick & Guillaumont Jeanneney, Sylviane & Wagner, Laurent, 2017. "How to Take into Account Vulnerability in Aid Allocation Criteria and Lack of Human Capital as Well: Improving the Performance Based Allocation," World Development, Elsevier, vol. 90(C), pages 27-40.
    2. Tony Addison & Finn Tarp, 2015. "Lessons for Japanese foreign aid from research on aid's impact," WIDER Working Paper Series 056, World Institute for Development Economic Research (UNU-WIDER).
    3. Furukawa, Mitsuaki & Mikami, Satoru, 2014. "Is Country-system-based Aid Really Better than Project-based Aid? Evidence from Rural Water Supply Management in Uganda," Working Papers 64, JICA Research Institute.
    4. repec:unu:wpaper:wp201558 is not listed on IDEAS
    5. Addison, Tony & Singhal, Saurabh & Tarp, Finn, 2013. "Aid to Africa: The Changing Context," WIDER Working Paper Series 144, World Institute for Development Economic Research (UNU-WIDER).
    6. Furukawa, Mitsuaki, 2014. "Aid Fragmentation and Effectiveness for Infant and Child Mortality and Primary School Completion," Working Papers 83, JICA Research Institute.
    7. repec:taf:jdevst:v:53:y:2017:i:7:p:1057-1074 is not listed on IDEAS
    8. repec:unu:wpaper:wp2015-58 is not listed on IDEAS
    9. Pierre-Richard Agénor, 2016. "Aid Volatility, Human Capital, and Growth," Centre for Growth and Business Cycle Research Discussion Paper Series 219, Economics, The Univeristy of Manchester.
    10. Ernesto Crivelli & Sanjeev Gupta, 2017. "Does Conditionality Mitigate the Potential Negative Effect of Aid on Revenues?," Journal of Development Studies, Taylor & Francis Journals, vol. 53(7), pages 1057-1074, July.

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