Title : Aid instability, aid effectiveness and economic growth

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Affiliation of Author(s):经济研究院

Title of Paper:Aid instability, aid effectiveness and economic growth

Journal:Development Policy Review

Place of Publication:英国

Key Words:aid instability, aid effectiveness, cyclicality, economic growth, stabilizing character

Abstract:Motivation: Despite large flows of official development assistance, the performance of recipient economies has been discouraging. Aid effectiveness, including the effect of instability of aid flows, has thus become a central concern.
Purpose: This article assesses the effect of unstable aid flows on aid effectiveness and economic growth.
Approach and Methods: We divide the aid effect into two stages:
without-aid and with-aid. The impact of aid volatility is etermined by the direction of volatility, the paths of aid and the incidence of its impact on the economy. The generalized method of moments (GMM) is applied to the panel data of 78 aid recipients from 2003 to 2017.
Findings: An open economy magnifies the impact of aid fluctuations (both positive and negative) for recipients highly dependent on aid. No statistically significant influence of aid volatility on growth can be seen. Volatility may however matter, since positive and negative impacts may offset each other. Aid unpredictability weakens aid efficiency and thus cripples growth.
Policy Implications: Donor agencies should make their assistance more predictable, above all in countries that depend heavily on aid.

First Author:刘乔巧

Indexed by:Unit Twenty Basic Research

Correspondence Author:李增刚

Document Code:C9CF660444304ED19842D1703F4D7384

Discipline:Economics

First-Level Discipline:Theoretical Economics

Volume:2022;40:e1

Issue:10.1111/dpr.12542

Page Number:1-22

Number of Words:15000

Translation or Not:no

Date of Publication:2022-01-01

Included Journals:SSCI