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Foreign Aid and Consumption Smoothing: Evidence From Global Food Aid

  • Erwin Tiongson
  • Benedict J. Clements
  • Sanjeev Gupta
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    Global food aid is considered a critical consumption smoothing mechanism in many countries. However, its record of stabilizing consumption has been mixed. This paper examines the cyclical properties of food aid with respect to food availability in recipient countries, with a view to assessing its impact on consumption in some 150 developing countries and transition economies, covering 1970 to 2000. The results show that global food aid has been allocated to countries most in need. Food aid has also been countercyclical within countries with the greatest need. However, for most countries, food aid is not countercyclical. The amount of food aid provided is also insufficient to mitigate contemporaneous shortfalls in consumption. The results are robust to various specifications and filtering techniques and have important implications for macroeconomic and fiscal management.

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    Paper provided by International Monetary Fund in its series IMF Working Papers with number 03/40.

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    Length: 26
    Date of creation: 01 Feb 2003
    Date of revision:
    Handle: RePEc:imf:imfwpa:03/40
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    2. Fabio Canova, 1994. "Does detrending matter for the determination of the reference cycle and the selection of turning points?," Economics Working Papers 113, Department of Economics and Business, Universitat Pompeu Fabra, revised Mar 1995.
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    5. Barrett, Christopher B., 1999. "Does Food Aid Stabilize Food Availability?," Working Papers 14757, Cornell University, Department of Applied Economics and Management.
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    7. Dollar, David & Alesina, Alberto, 2000. "Who Gives Foreign Aid to Whom and Why?," Scholarly Articles 4553020, Harvard University Department of Economics.
    8. Trueblood, Michael A. & Shapouri, Shahla & Henneberry, Shida Rastegari, 2001. "Policy Options To Stabilize Food Supplies: A Case Study Of Southern Africa," Agricultural Information Bulletins 33703, United States Department of Agriculture, Economic Research Service.
    9. Ball, Richard & Johnson, Christopher, 1996. "Political, Economic, and Humanitarian Motivations for PL 480 Food Aid: Evidence from Africa," Economic Development and Cultural Change, University of Chicago Press, vol. 44(3), pages 515-37, April.
    10. Maxwell, S. J. & Singer, H. W., 1979. "Food aid to developing countries: A survey," World Development, Elsevier, vol. 7(3), pages 225-246, March.
    11. Shapouri, Shahla & Rosen, Stacey L., 2001. "Food Security and Food Aid Distribution," Agricultural Information Bulletins 33651, United States Department of Agriculture, Economic Research Service.
    12. Bulir, Ales & Hamann, A. Javier, 2001. "How Volatile and Unpredictable are Aid Flows, and What are the Policy Implications?," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
    13. Diven, Polly J., 2001. "The domestic determinants of US food aid policy," Food Policy, Elsevier, vol. 26(5), pages 455-474, October.
    14. Stephane Pallage & Michel Robe, 1998. "Foreign Aid and the Business Cycle," Cahiers de recherche CREFE / CREFE Working Papers 63, CREFE, Université du Québec à Montréal.
    15. Konandreas, Panos, 1987. "Responsiveness of Food Aid in Cereals to Fiuctuations in Supply in Donor and Recipient Countries," Occasional Paper Series No. 4 197395, International Association of Agricultural Economists.
    16. Barrett, Christopher B., 2002. "Food security and food assistance programs," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 40, pages 2103-2190 Elsevier.
    17. Lavy, Victor, 1990. "Does food aid depress food production? The disincentive dilemma in the African context," Policy Research Working Paper Series 460, The World Bank.
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