IDEAS home Printed from https://ideas.repec.org/p/unu/wpaper/rp2007-38.html

The Short-Run Macroeconomic Impact of Foreign Aid to Small States: An Agnostic Timeseries Analysis

Author

Listed:
  • Henrik Hansen
  • Derek Headey

Abstract

This study econometrically evaluates the short-run impact of aid in small developing countries (SDCs) by applying a VAR model to study aid's impact on 'absorption' (increasing import demand) and 'spending' (increased domestic demand) across countries. Whilst our approach allows parameters to vary across countries, the focus is on average country effects and differential effects within certain subgroups of countries.

Suggested Citation

  • Henrik Hansen & Derek Headey, 2007. "The Short-Run Macroeconomic Impact of Foreign Aid to Small States: An Agnostic Timeseries Analysis," WIDER Working Paper Series RP2007-38, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:rp2007-38
    as

    Download full text from publisher

    File URL: https://www.wider.unu.edu/sites/default/files/rp2007-38.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Temple, Jonathan & Van de Sijpe, Nicolas, 2017. "Foreign aid and domestic absorption," Journal of International Economics, Elsevier, vol. 108(C), pages 431-443.
    2. Lof, Matthijs & Mekasha, Tseday Jemaneh & Tarp, Finn, 2015. "Aid and Income: Another Time-series Perspective," World Development, Elsevier, vol. 69(C), pages 19-30.
    3. Hendrik W. Kruse & Inmaculada Martínez‐Zarzoso, 2021. "Transfers in the gravity equation," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 54(1), pages 410-442, February.
    4. Zoundi, Zakaria, 2015. "The Absorption and Spending Capacity of Aid in the Economic Community of West African States," MPRA Paper 66736, University Library of Munich, Germany, revised 23 Aug 2015.
    5. Gravier-Rymaszewska, Joanna, 2012. "How Aid Supply Responds to Economic Crises: A Panel VAR Approach," WIDER Working Paper Series 025, World Institute for Development Economic Research (UNU-WIDER).
    6. Ahiteme N. Houndonougbo, 2017. "Aid Volatility and Real Business Cycles in a Developing Open Economy," Southern Economic Journal, John Wiley & Sons, vol. 83(3), pages 756-773, January.
    7. Jeffrey A Edwards & Alfredo A. Romero, 2020. "Volatility, island nations and small states," Economics and Business Letters, Oviedo University Press, vol. 9(3), pages 248-254.
    8. Kar, Ashim Kumar, 2016. "Aid and Human Development: Is There A Role for Good Policy Environment?," MPRA Paper 95433, University Library of Munich, Germany, revised 2018.
    9. Alege P.O. & George E.O. & Ojeaga P.I. & Oluwatimiro Q., 2015. "Is Africa’s current growth reducing inequality? Evidence from some selected african countries," Computational Methods in Social Sciences (CMSS), "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences, vol. 3(1), pages 49-67, June.
    10. Lof, Matthijs & Mekasha, Tseday Jemaneh & Tarp, Finn, 2015. "Aid and Income: Another Time-series Perspective," World Development, Elsevier, vol. 69(C), pages 19-30.
    11. Qayyum, Unbreen & Din, Musleh-ud & Haider, Adnan, 2014. "Foreign aid, external debt and governance," Economic Modelling, Elsevier, vol. 37(C), pages 41-52.
    12. Shonchoy, Abu S., 2010. "The dynamics of spending and absorption of aid : panel data analysis," IDE Discussion Papers 245, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    13. Joanna Gravier-Rymaszewska, 2012. "How Aid Supply Responds to Economic Crises: A Panel VAR Approach," WIDER Working Paper Series wp-2012-025, World Institute for Development Economic Research (UNU-WIDER).
    14. Wei-long Wu & Changqi Shao, 2023. "How does home and host-country policy uncertainty affect outward FDI? Firm-level evidence from China," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(2), pages 495-515, July.
    15. repec:unu:wpaper:wp2012-25 is not listed on IDEAS
    16. Robert Gillanders, 2016. "The Effects of Foreign Aid in Sub-Saharan Africa," The Economic and Social Review, Economic and Social Studies, vol. 47(3), pages 339-360.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:unu:wpaper:rp2007-38. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Siméon Rapin (email available below). General contact details of provider: https://edirc.repec.org/data/widerfi.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.