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Grants to needy countries? A study of aid composition between 1975 and 2005

  • Johansson, Pernilla

    ()

    (Ministry of Finance)

Registered author(s):

    This paper studies whether the poorest and most indebted countries receive aid in the form of grants rather than loans. By studying bilateral aid flows to low- and middle-income countries between 1975 and 2005, the paper provides evidence on the determinants of the grant component of aid flows. While the empirical analysis finds no evidence that more indebted countries receive a higher grant component, it shows that poorer countries receive a significantly higher grant component of aid, although the size of the effect is rather limited.

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    File URL: http://project.nek.lu.se/publications/workpap/Papers/WP09_19.pdf
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    Paper provided by Lund University, Department of Economics in its series Working Papers with number 2009:19.

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    Length: 30 pages
    Date of creation: 17 Dec 2009
    Date of revision:
    Handle: RePEc:hhs:lunewp:2009_019
    Contact details of provider: Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
    Phone: +46 +46 222 0000
    Fax: +46 +46 2224613
    Web page: http://www.nek.lu.se/en

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    1. Jean Imbs & Romain Rancière, 2005. "The overhang hangover," Economics Working Papers 878, Department of Economics and Business, Universitat Pompeu Fabra.
    2. Alexander Pivovarsky & Benedict J. Clements & Sanjeev Gupta & Erwin Tiongson, 2003. "Foreign Aid and Revenue Response; Does the Composition of Aid Matter?," IMF Working Papers 03/176, International Monetary Fund.
    3. Charles C. Chang & Eduardo Fernández-Arias & Luis Serven, 1998. "Measuring Aid Flows: A New Approach," Research Department Publications 4146, Inter-American Development Bank, Research Department.
    4. Daniel Cohen & Pierre Jacquet & Helmut Reisen, 2007. "Loans or Grants?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 143(4), pages 764-782, December.
    5. Nunnenkamp, Peter & Thiele, Rainer & Wilfer, Tom, 2005. "Grants versus loans: Much ado about (almost) nothing," Kiel Economic Policy Papers 4, Kiel Institute for the World Economy (IfW).
    6. Tito Cordella & Hulya Ulku, 2007. "Grants vs. Loans," IMF Staff Papers, Palgrave Macmillan, vol. 54(1), pages 139-162, May.
    7. Simeon Djankov & Jose G. Montalvo & Marta Reynal-Querol, 2006. "Does Foreign Aid Help," Cato Journal, Cato Journal, Cato Institute, vol. 26(1), pages 1-28, Winter.
    8. Bulow, Jeremy & Rogoff, Kenneth S., 2005. "Grants versus Loans for Development Banks," Scholarly Articles 11129181, Harvard University Department of Economics.
    9. Paul R. Krugman, 1988. "Financing vs. Forgiving a Debt Overhang," NBER Working Papers 2486, National Bureau of Economic Research, Inc.
    10. Alesina, Alberto & Dollar, David, 2000. " Who Gives Foreign Aid to Whom and Why?," Journal of Economic Growth, Springer, vol. 5(1), pages 33-63, March.
    11. Catherine Pattillo & Hélène Poirson & Luca Antonio Ricci, 2011. "External Debt and Growth," Review of Economics and Institutions, Università di Perugia, vol. 2(3).
    12. Leslie E. Papke & Jeffrey M. Wooldridge, 1993. "Econometric Methods for Fractional Response Variables with an Application to 401(k) Plan Participation Rates," NBER Technical Working Papers 0147, National Bureau of Economic Research, Inc.
    13. Iimi, Atsushi & Ojima, Yasuhisa, 2008. "Complementarities between grants and loans," Journal of the Japanese and International Economies, Elsevier, vol. 22(1), pages 109-141, March.
    14. Silvia Marchesi & Alessandro Missale, 2012. "How defensive were lending and aid to HIPC?," Working Papers 220, University of Milano-Bicocca, Department of Economics, revised Feb 2012.
    15. Scully, Gerald W, 1988. "The Institutional Framework and Economic Development," Journal of Political Economy, University of Chicago Press, vol. 96(3), pages 652-62, June.
    16. William Easterly, 2007. "Are aid agencies improving?," Economic Policy, CEPR;CES;MSH, vol. 22, pages 633-678, October.
    17. Dollar, David & Levin, Victoria, 2006. "The Increasing Selectivity of Foreign Aid, 1984-2003," World Development, Elsevier, vol. 34(12), pages 2034-2046, December.
    18. Kilby, Christopher, 2009. "The political economy of conditionality: An empirical analysis of World Bank loan disbursements," Journal of Development Economics, Elsevier, vol. 89(1), pages 51-61, May.
    19. Axel Dreher & Jan-Egbert Sturm & James Raymond Vreeland, 2007. "Development Aid and International Politics: Does membership on the UN Security Council influence World Bank decisions?," KOF Working papers 07-171, KOF Swiss Economic Institute, ETH Zurich.
    20. Matthew Odedokun, 2004. "Multilateral and Bilateral Loans versus Grants: Issues and Evidence," The World Economy, Wiley Blackwell, vol. 27(2), pages 239-263, 02.
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