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The Landscape of Capital Flows to Low-Income Countries

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Listed:
  • Thomas William Dorsey
  • Zuzana Brixiova
  • Sukhwinder Singh
  • Helaway Tadesse

Abstract

This paper reviews trends in capital flows and capital-like flows such as official grants and remittances to low-income countries over the period 1981-2006. The survey reveals a broadbased increase in such flows as a share of low-income country GDP across major regions, countries with differing commodity export composition, and countries with differing debt relief status. The increase in inflows is dominated by an increase in private sector inflows, mostly in the form of private transfers and foreign direct investment. Official sector inflows have remained comparatively constant as a share of low-income country GDP and even declined in the most recent years. The paper concludes with some tentative policy conclusions and has a discussion of data issues in the annexes.

Suggested Citation

  • Thomas William Dorsey & Zuzana Brixiova & Sukhwinder Singh & Helaway Tadesse, 2008. "The Landscape of Capital Flows to Low-Income Countries," IMF Working Papers 08/51, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:08/51
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    References listed on IDEAS

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    1. Jan Kees Martijn & Gabriel Di Bella & Shamsuddin Tareq & Benedict J. Clements & Abebe Aemro Selassie, 2006. "Designing Monetary and Fiscal Policy in Low-Income Countries," IMF Occasional Papers 250, International Monetary Fund.
    2. Ralph Chami & Connel Fullenkamp & Samir Jahjah, 2005. "Are Immigrant Remittance Flows a Source of Capital for Development?," IMF Staff Papers, Palgrave Macmillan, vol. 52(1), pages 55-81, April.
    3. Matthias Busse & José Luis Groizard, 2008. "Foreign Direct Investment, Regulations and Growth," The World Economy, Wiley Blackwell, vol. 31(7), pages 861-886, July.
    4. Agnès Bénassy-Quéré & Maylis Coupet & Thierry Mayer, 2007. "Institutional Determinants of Foreign Direct Investment," The World Economy, Wiley Blackwell, vol. 30(5), pages 764-782, May.
    5. Andrew Berg & Mumtaz Hussain & Shaun K. Roache & Amber A Mahone & Tokhir N Mirzoev & Shekhar Aiyar, 2007. "The Macroeconomics of Scaling Up Aid; Lessons from Recent Experience," IMF Occasional Papers 253, International Monetary Fund.
    6. Helaway Tadesse & Mark W Lewis & Jörg Zeuner & James A John & Luzmaria Monasi & Paolo Dudine, 2006. "Weathering the Storm So Far; The Impact of the 2003–05 Oil Shock on Low-Income Countries," IMF Working Papers 06/171, International Monetary Fund.
    7. Barry P. Bosworth & Susan M. Collins, 1999. "Capital Flows to Developing Economies: Implications for Saving and Investment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 30(1), pages 143-180.
    8. W. A. Naude & W. F. Krugell, 2007. "Investigating geography and institutions as determinants of foreign direct investment in Africa using panel data," Applied Economics, Taylor & Francis Journals, vol. 39(10), pages 1223-1233.
    9. Asiedu, Elizabeth, 2002. "On the Determinants of Foreign Direct Investment to Developing Countries: Is Africa Different?," World Development, Elsevier, vol. 30(1), pages 107-119, January.
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    Cited by:

    1. repec:pal:imfecr:v:65:y:2017:i:2:d:10.1057_s41308-016-0025-x is not listed on IDEAS
    2. Corinne Deléchat & John Wakeman-Linn & Smita Wagh & Gustavo Ramirez, 2009. "Sub-Saharan Africa's Integration in the Global Financial Markets," IMF Working Papers 09/114, International Monetary Fund.
    3. Juliana Dutra Araujo & Antonio David & Carlos van Hombeeck & Chris Papageorgiou, 2015. "Non-FDI Capital Inflows in Low-Income Developing Countries; Catching the Wave?," IMF Working Papers 15/86, International Monetary Fund.
    4. Juliana Dutra Araujo & Antonio David & Carlos van Hombeeck & Chris Papageorgiou, 2015. "Joining the Club? Procyclicality of Private Capital Inflows in Low Income Developing Countries," IMF Working Papers 15/163, International Monetary Fund.
    5. Benoît, Jean-Pierre & Galbiati, Roberto & Henry, Emeric, 2017. "Investing to cooperate: Theory and experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 144(C), pages 1-17.
    6. Zorobabel Bicaba & Zuzana Brixiova & Mthuli Ncube, 2015. "Working Paper - 217 - Capital Account Policies, IMF Programs and Growth in Developing Regions," Working Paper Series 2155, African Development Bank.
    7. Philip R. Lane, 2015. "International Financial Flows in Low-Income Countries," Pacific Economic Review, Wiley Blackwell, vol. 20(1), pages 49-72, February.
    8. repec:cml:incoes:4sp is not listed on IDEAS
    9. Jean-Louis COMBES & Patrick PLANE & Tidiane KINDA, 2010. "Capital Flows and their Impact on the Real Effective Exchange Rate," Working Papers 201032, CERDI.
    10. Araujo, Juliana D. & Li, Bin Grace & Poplawski-Ribeiro, Marcos & Zanna, Luis-Felipe, 2016. "Current account norms in natural resource rich and capital scarce economies," Journal of Development Economics, Elsevier, vol. 120(C), pages 144-156.
    11. Zorobabel Bicaba & Zuzana Brixiov?? & Mthuli Ncube, 2014. "Capital Account Policies, Imf Programs And Growth In Developing Regions," William Davidson Institute Working Papers Series wp1085, William Davidson Institute at the University of Michigan.
    12. Araujo, Juliana D. & David, Antonio C. & van Hombeeck, Carlos & Papageorgiou, Chris, 2017. "Joining the club? Procyclicality of private capital inflows in lower income developing economies," Journal of International Money and Finance, Elsevier, vol. 70(C), pages 157-182.
    13. repec:cml:incocp:4sp-10 is not listed on IDEAS

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