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The Economics of Post Conflict Aid

Author

Listed:
  • James McHugh
  • Theodora Kosma
  • Dimitri G Demekas

Abstract

Post conflict aid is different from conventional development aid and has different effects on the recipient economy. The paper builds a theoretical model tailored around the main stylized facts of post conflict aid and traces the impact of different kinds of post-conflict aid on capital accumulation, growth, welfare, and resource allocation. While both humanitarian and reconstruction aid are welfare-enhancing, humanitarian aid reduces long-run capital accumulation and growth. Reconstruction aid, on the other hand, may increase the long-run capital stock and, if carefully designed, avoid the pitfalls of the Dutch disease.

Suggested Citation

  • James McHugh & Theodora Kosma & Dimitri G Demekas, 2002. "The Economics of Post Conflict Aid," IMF Working Papers 02/198, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:02/198
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    References listed on IDEAS

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    8. Krugman, Paul, 1987. "The narrow moving band, the Dutch disease, and the competitive consequences of Mrs. Thatcher : Notes on trade in the presence of dynamic scale economies," Journal of Development Economics, Elsevier, vol. 27(1-2), pages 41-55, October.
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    Cited by:

    1. Michael Bleaney & Arcangelo Dimico, 2011. "The Intensity of Conflict, Growth and Post-Conflict Recovery," Discussion Papers 11/03, University of Nottingham, CREDIT.
    2. repec:unu:wpaper:wp2012-07 is not listed on IDEAS
    3. Dimico, Arcangelo, 2013. "The Evolution of Conflict and Effectiveness of Aid," MPRA Paper 47050, University Library of Munich, Germany.
    4. Nasery, Jawid Ahmad, 2014. "The Economic Shock to Afghanistan Caused by Aid Reduction and Troops Withdrawal," IEE Working Papers 202, Ruhr University Bochum, Institute of Development Research and Development Policy (IEE).
    5. Frances Stewart & Rachita Daga, 2017. "Does the way civil wars end affect the pattern of post-conflict development?," Oxford Development Studies, Taylor & Francis Journals, vol. 45(2), pages 145-170, April.

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