How volatile and unpredictable are aid flows, and what are the policy implications?

Arbeitspapier

This paper examines empirical evidence on the volatility and uncertainty of aid flows, and the main policy implications. Aid is found to be more volatile than fiscal revenues—particularly in highly aid-dependent countries—and mildly procyclical in relation to activity in the recipient country. These findings imply that the current pattern of aid disbursements is welfare-reducing. We also find that uncertainty about aid disbursements is large and that the information content of commitments made by donors is either very small or statistically insignificant. Policies to cope with these features of aid, as well as broader international efforts to reduce the volatility and procyclicality of aid, are briefly discussed.

Object Details

• ISBN: 9291901113
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WIDER Discussion Paper ; No. 2001/143

Classification and Topics

• Classification: Wirtschaft ; Foreign Aid ; International Linkages to Development; Role of International Organizations
• Subject: external aid ; volatility ; predictability ; IMF-supported programs ; Entwicklungshilfe ; Anpassungsprogramm des IWF

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bulír, Aleés ; Hamann, A. Javier
• Event: Veröffentlichung
• (who): The United Nations University World Institute for Development Economics Research (UNU-WIDER)
• (where): Helsinki
• (when): 2001

Further information

• Handle: http://hdl.handle.net/10419/52840
• Last update: 10.03.2025, 11:44 AM CET