Foreign Aid and Revenue Response : Does the Composition of Aid Matter?

WPIEA1762003 Image
Price:  $15.00

Author/Editor: Alexander Pivovarsky, Benedict J Clements, Sanjeev Gupta, Erwin Tiongson
Release Date: © September, 2003
ISBN : 978-1-45185-883-9
Stock #: WPIEA1762003
English
Stock Status: On back-order

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Description

This paper examines the revenue response to inflows of foreign aid in 107 countries during the period 1970–2000, In particular, it investigates whether the impact of aid on the revenue effort depends on the composition of aid (grants vis-à-vis loans). The results indicate that while concessional loans are associated with higher domestic revenue mobilization, the opposite is true of grants. On average, the dampening effect of grants on the revenue effort is modest. However, for those countries plagued by high levels of corruption, our results suggest that the decline in revenues completely offsets the increase in grants. The results are robust to various specifications.

Taxonomy

Banks and banking , Development assistance , Economic development , Financial institutions and markets , Loans




More publications in this series: Working Papers


More publications by: Alexander Pivovarsky ; Benedict J Clements ; Sanjeev Gupta ; Erwin Tiongson