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Foreign Aid, Public Savings Displacement and Aid Dependency in Cote d'Ivoire: An Aid Disaggregation Approach

  • Bazoumana Ouattara

This paper uses the fiscal response framework to investigate the extent to which different categories of foreign aid flows, namely project aid, programme aid, technical assistance and food aid, displace public savings and affect the recipient country's dependence on aid, using time series data for Cote d'Ivoire for the period 1975-99.The results indicate that, in general, project aid flows tend to reduce public savings and worsen Cote d'Ivoire's dependence on aid more than the other categories of aid flows. This finding therefore suggests that accounting for aid heterogeneity in aid studies as well as aid policies design and implementation could be crucial in improving aid effectiveness to achieve the Millennium Development Goals.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/13600810601167579
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Article provided by Taylor & Francis Journals in its journal Oxford Development Studies.

Volume (Year): 35 (2007)
Issue (Month): 1 ()
Pages: 33-46

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Handle: RePEc:taf:oxdevs:v:35:y:2007:i:1:p:33-46
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  1. Binh, Tran-Nam & McGillivray, Mark, 1993. "Foreign aid, taxes and public investment A comment," Journal of Development Economics, Elsevier, vol. 41(1), pages 173-176, June.
  2. Bacha, Edmar L., 1990. "A three-gap model of foreign transfers and the GDP growth rate in developing countries," Journal of Development Economics, Elsevier, vol. 32(2), pages 279-296, April.
  3. Boone, Peter, 1996. "Politics and the effectiveness of foreign aid," European Economic Review, Elsevier, vol. 40(2), pages 289-329, February.
  4. Mosley, Paul & Hudson, John & Horrell, Sara, 1987. "Aid, the Public Sector and the Market in Less Developed Countries," Economic Journal, Royal Economic Society, vol. 97(387), pages 616-41, September.
  5. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
  6. Franco-Rodriguez, Susana & Morrissey, Oliver & McGillivray, Mark, 1998. "Aid and the Public Sector in Pakistan: Evidence with Endogenous Aid," World Development, Elsevier, vol. 26(7), pages 1241-1250, July.
  7. Charalambos Pattichis, 2004. "Budget and trade deficits in Lebanon," Applied Economics Letters, Taylor & Francis Journals, vol. 11(2), pages 105-108.
  8. George Mavrotas, 2002. "Foreign aid and fiscal response: Does aid disaggregation matter?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 138(3), pages 534-559, September.
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