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

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  • Bazoumana Ouattara

Abstract

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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  • Bazoumana Ouattara, 2007. "Foreign Aid, Public Savings Displacement and Aid Dependency in Cote d'Ivoire: An Aid Disaggregation Approach," Oxford Development Studies, Taylor & Francis Journals, vol. 35(1), pages 33-46.
  • Handle: RePEc:taf:oxdevs:v:35:y:2007:i:1:p:33-46
    DOI: 10.1080/13600810601167579
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    References listed on IDEAS

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    1. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
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    5. Charalambos Pattichis, 2004. "Budget and trade deficits in Lebanon," Applied Economics Letters, Taylor & Francis Journals, vol. 11(2), pages 105-108.
    6. Boone, Peter, 1996. "Politics and the effectiveness of foreign aid," European Economic Review, Elsevier, vol. 40(2), pages 289-329, February.
    7. George Mavrotas, 2002. "Foreign aid and fiscal response: Does aid disaggregation matter?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(3), pages 534-559, September.
    8. 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.
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    Cited by:

    1. Limodio, Nicola, 2011. "The impact of pro-vulnerable income transfers : Leisure, dependency and a distribution hypothesis," Policy Research Working Paper Series 5881, The World Bank.
    2. Bazoumana Ouattara, 2009. "A re-examination of the savings displacement hypothesis," Empirical Economics, Springer, vol. 36(3), pages 671-683, June.

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