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Fiscal Effects of Aid

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  • Mark McGillivray
  • Oliver Morrissey

Abstract

It is clear from the implications of growth theory that the impact of aid depends on how it affects savings, investment and government behaviour. In respect of low-income c ountries, which are the principal aid recipients and the economies for which the issue of the impact of aid on growth is most important, it is government that is most important. This paper presents a review of studies that address the impact of aid on government fiscal behaviour. In particular, the focus is on fungibility and fiscal response studies.

Suggested Citation

  • Mark McGillivray & Oliver Morrissey, 2001. "Fiscal Effects of Aid," WIDER Working Paper Series DP2001-61, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:dp2001-61
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