How Volatile and Unpredictable are Aid Flows, and What are the Policy Implications?
This paper examines empirical evidence on the volatility and uncertainty of aid flows, and the main policy implications. Aid is found to be more volatile than fiscal revenues- particularly in highly aid-dependent countries-and mildly procyclical in relation to activity in the recipient country. These findings imply that the current pattern of aid disbursements is welfare-reducing. We also find that uncertainty about aid disbursements is large and that the information content of commitments made by donors is either very small or statistically insignificant. Policies to cope with these features of aid, as well as broader international efforts to reduce the volatility and procyclicality of aid, are briefly discussed.
(This abstract was borrowed from another version of this item.)
|Date of creation:||2001|
|Contact details of provider:|| Postal: Katajanokanlaituri 6B, 00160 Helsinki|
Web page: http://www.wider.unu.edu/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:unu:wpaper:dp2001-143. 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: (Mauricio Roa Grisales)
If references are entirely missing, you can add them using this form.