A timeseries analysis of the impact of foreign aid on central government's fiscal budget in Uganda

Arbeitspapier

A dynamic relationship between foreign aid and domestic fiscal variables in Uganda is analysed using a cointegrated vector autoregressive model over the period 1972-2008. Results show that aid is a significant element of long-run fiscal equilibrium, is associated with increased tax effort and public spending, and reduced domestic borrowing. Shocks to tax revenue are the pulling forces, while those to domestic borrowing, government spending and aid are the pushing forces of the system. In terms of policy, it is crucial for donors to increase the reliability and predictability of aid, coordinate aid delivery systems and also make aid more transparent.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WIDER Working Paper ; No. 2013/101

Classification and Topics

• Classification: Wirtschaft ; Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models ; Foreign Aid ; Fiscal and Monetary Policy in Development ; Economywide Country Studies: Africa
• Subject: domestic fiscal variables ; aid ; economic instability ; ESAP ; CVAR ; common trends ; Uganda

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bwire, Thomas ; Morrissey, Oliver ; Lloyd, Tim
• Event: Veröffentlichung
• (who): The United Nations University World Institute for Development Economics Research (UNU-WIDER)
• (where): Helsinki
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/93688
• Last update: 10.03.2025, 11:41 AM CET