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Aid volatility, policy and development


Reference:

Hudson, J. and Mosley, P., 2008. Aid volatility, policy and development. World Development, 36 (10), pp. 2082-2102.

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Official URL:

http://dx.doi.org/10.1016/j.worlddev.2007.02.018

Abstract

We build on Bulir and Hamann's analysis of aid volatility [Bulir, A., & Hamann, J. (2003). Aid volatility: An empirical assessment. IMF Staff Papers, 50(1) 64-89: Bulir, A.. & Hamann, J. (2008) Volatility of development aid: From the frying pan into the fire? Washington DC: IMF, paper submitted to this Special Section], showing that the conclusions reached depend on the dataset used. Their argument that the poorest Countries have the highest volatility appears not to be correct. The impact of volatility on growth is negative overall, but differs between positive and negative volatility. The mix between "responsive" components of aid, for example, programme aid, and "proactive" components. for example, technical assistance, is important. Finally, we conclude that measures which increase trust between donor and recipient, and reductions in the degree of donor "oligopoly." reduce aid volatility without obviously reducing its effectiveness.

Details

Item Type Articles
CreatorsHudson, J.and Mosley, P.
DOI10.1016/j.worlddev.2007.02.018
Uncontrolled Keywordsupside and downside volatility, trust, aid volatility, disasters
DepartmentsFaculty of Humanities & Social Sciences > Social & Policy Sciences
Faculty of Humanities & Social Sciences > Economics
RefereedYes
StatusPublished
ID Code12389

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