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Determinants of Development Financing Flows From Brazil, Russia, India, and China to Low-Income Countries

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  • Nkunde Mwase

Abstract

BRICs development financing flows have increased significantly and are expected to become more prominent in the post-crisis era. We investigate the potential implications on the country-allocation of loan commitments and the degree of concessionality using a panel vector autoregression model and single equation dynamic panel estimation.We find that BRICs lend more to LICs with weaker institutions. Land-locked, resource-scarce LICs receive significantly less financing than other resource-rich LICs. The degree of concessionality is negatively correlated with the amount of loans and positively correlated with better institutional indicators suggesting that the higher the risks, the higher the required returns that BRICs expect.

Suggested Citation

  • Nkunde Mwase, 2011. "Determinants of Development Financing Flows From Brazil, Russia, India, and China to Low-Income Countries," IMF Working Papers 11/255, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:11/255
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    1. Cassimon, Danny & Claessens, Stijn & Campenhout, Bjorn van, 2007. "Empirical Evidence on the New International Aid Architecture," Proceedings of the German Development Economics Conference, Göttingen 2007 2, Verein für Socialpolitik, Research Committee Development Economics.
    2. Hulya Ulku & Tito Cordella, 2004. "Grants Versus Loans," IMF Working Papers 04/161, International Monetary Fund.
    3. Finn Tarp, 2006. "Aid and Development," Discussion Papers 06-12, University of Copenhagen. Department of Economics.
    4. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
    5. Sophia Gollwitzer & Eteri Kvintradze & Tej Prakash & Luis-Felipe Zanna & Era Dabla-Norris & Richard I Allen & Irene Yackovlev & Victor Duarte Lledo, 2010. "Budget Institutions and Fiscal Performance in Low-Income Countries," IMF Working Papers 10/80, International Monetary Fund.
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    Cited by:

    1. Vijaya Ramachandran, Julie Walz, 2011. " Brave New World: A Literature Review of Emerging Donors and the Changing Nature of Foreign Assistanc- Working Paper 273," Working Papers 273, Center for Global Development.
    2. Finn Ole Semrau & Rainer Thiele, 2017. "Brazil's Development Cooperation: Following in China's and India's Footsteps?," Journal of International Development, John Wiley & Sons, Ltd., vol. 29(3), pages 287-307, April.
    3. Yongzheng Yang & Nkunde Mwase, 2012. "BRICs’ Philosophies for Development Financing and their Implications for LICs," IMF Working Papers 12/74, International Monetary Fund.
    4. Furukawa, Mitsuaki, 2014. "Management of the International Development Aid System Aid System and the Creation of Political Space for China:The Case of Tanzania," Working Papers 82, JICA Research Institute.
    5. Austin Strange & Bradley Parks & Michael J. Tierney & Andreas Fuchs & Axel Dreher & Vijaya Ramachandran, 2013. "China’s Development Finance to Africa: A Media-Based Approach to Data Collection," Working Papers 323, Center for Global Development.
    6. repec:eee:wdevel:v:96:y:2017:i:c:p:529-549 is not listed on IDEAS

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