IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Aid and Savings in Sub-saharan Africa: Should we Worry about Rising Aid Levels?

  • John Serieux

    ()

    (Assistant Professor, Dept. of Economics, University of Manitoba)

Registered author(s):

    This paper examines the effect of aid on domestic savings in Sub-Saharan Africa. It departs from the previous literature on aid and savings in developing countries by abandoning the pervasive, but untenable, assumption that all aid is used to expand the trade deficit and thus applied wholly to consumption or investment. In fact, for the period 1965-2006, the evidence suggests that 35% of any increase in aid relative to output was used to finance reverse flows (some combination of interest payments, debt amortization, capital flight and reserve increases), 41% was used to increase consumption relative to output (meaning a reduction in the domestic savings rates) and 24% was used to increase the rate of investment. However, during the extended period of increasing aid levels from the early 1970s to mid 1990s, reverse flows were a larger proportion of aid but more aid was invested and less was consumed. Also, concerns about potential aid hangovers, when current high aid levels subside, can be assuaged by the evidence that that effect has been historically uncommon in the region despite many episodes of high aid levels followed by sharp declines. (...)

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.ipc-undp.org/pub/IPCWorkingPaper50.pdf
    File Function: First version, 2009
    Download Restriction: no

    Paper provided by International Policy Centre for Inclusive Growth in its series Working Papers with number 50.

    as
    in new window

    Length: 29
    Date of creation: Feb 2009
    Date of revision:
    Publication status: Published by UNDP - International Policy Centre for Inclusive Growth , February 2009, pages 1-29
    Handle: RePEc:ipc:wpaper:50
    Contact details of provider: Web page: http://www.ipc-undp.org
    Email:


    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:ipc:wpaper:50. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Andre Lyra)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.