Volatility of Development Aid: From the Frying Pan into the Fire?

By Aleš Bulíř, A. J. Hamann. Social Science Research Network, 2008

365 citations recorded by the source corpus.

The positive impact of foreign aid is limited by the erratic behavior of aid flows. The introduction in 1999 of various initiatives anchored in Poverty Reduction Strategy Papers (PRSPs) which were aimed at strengthening coordination among donors, improving the design of financial support programs, and improving domestic records of policy implementation should have led to an improvement in the time series properties of aid flows. We find no evidence of any fundamental changes in the way aid has been delivered in the past five years. If anything, aid volatility has worsened somewhat and the information value of long-term lending commitments has declined. We take these results to mean that the main causes of the volatility and unpredictability of aid, and the broader issue of macroeconomic instability in low-income countries, have not been addressed in a systematic manner by the donor community.

Subfields: Development, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/80f46e9e8328006ffa1dc70d66d22b94e08e8de3

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Development

1. Sam Jones
2. F. Tarp
3. Lucie Gadenne
4. Hidemi Kimura
5. Yasuyuki Todo
6. L. Lipschitz
7. Timothy D. Lane
8. Aleš Bulíř

In Sociology and Political Science

1. Lucie Gadenne
2. L. Lipschitz
3. Hidemi Kimura
4. Timothy D. Lane
5. F. Tarp
6. Aleš Bulíř
7. Sam Jones
8. C. Arellano

Citations in the corpus

• The Dynamic Implications of Foreign Aid and its Variability (2005, background): “However, the available evidence does not support the view of aid as a “ shock absorber ” (Bulí ř and Hamann, 2008).”
• Is Foreign Aid a Vanguard of Foreign Direct Investment? A Gravity-Equation Approach (2010, background): “Foreign aid is also found volatile (Bulir & Hamann, 2008).”
• Does foreign aid harm political institutions (2015, background): “that aid volatility is high and is likely to undermine its effectiveness (Bulíř and Hamann, 2008; Arellano et al., 2009).”
• Tax me, but spend wisely? Sources of public finance and government accountability (2015, background): “The high volatility of aid revenues has for example been invoked to explain why aid is not necessarily spent on infrastructure investments (Bulir and Hamann, 2008).”