کمک غیر قابل پیش بینی و رشد اقتصادی
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|13053||2012||7 صفحه PDF||سفارش دهید||5692 کلمه|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : World Development, Volume 40, Issue 2, February 2012, Pages 266–272
In this paper, we examine the influence of unpredictable aid on a recipient’s economic growth. If aid amounts vary by year and the changes are unpredictable, we expect that this “unpredictability” decreases aid’s growth-enhancing effect. This naturally raises the questions: How large is the influence of aid “unpredictability” on a recipient’s economic growth? Does “unpredictability” significantly damage aid’s growth-enhancing effect? Our research shows that the impact is significant; in a typical case, one fifth of aid is wasted due to “unpredictability.” Further, it is possible that in some cases, the aid may be wasted by as much as one third.
In this paper, we examine how strongly aid “unpredictability” affects a recipient’s economic growth. If aid amounts vary by year and the changes are unpredictable, we expect that this “unpredictability” might have an impact on aid’s growth-enhancing effect. This naturally raises the questions: How large is the influence of aid “unpredictability” on a recipient’s economic growth? Does “unpredictability” significantly damage aid’s growth-enhancing effect? Which factors strongly affect this impact? Can a donor improve aid efficiency? Our research shows that the impact is significant; in a typical case, one fifth of aid is wasted due to “unpredictability.” Further, it is possible that in some cases, the effect of aid may be wasted by as much as one third. The “unpredictability” examined in this research arises from the violation of aid donors’ commitments. This suggests that donors can make aid much more efficient by meeting their commitments. Even if it is difficult for donors to meet their commitments, we point out that the loss may be reduced by changing the timing of disbursement. This research contributes to the literature in three major aspects. First, previous studies investigate the relationship between aid volatility and its short-term effects on a recipient country. By contrast, this study examines one aspect of the relationship between aid volatility and its long-term effect—effect on economic growth. Second, we numerically measure the magnitude of the impact. Intuitively, “unpredictability” is expected to have a negative impact on aid’s growth-enhancing effect. The magnitude of this negative impact is unclear, however. We examine the magnitude of the impact using a dynamic stochastic general equilibrium model. Third, we propose an original approach of model-building; we introduce a capital formation mechanism in which a pre-designed investment plan affects the level of new investments. The remainder of the paper is organized as follows. In Section 2, we briefly examine the previous literature on short-term aid behavior. In Section 3, we outline investments’ responses to unpredictable aid changes. Section 4 introduces our economic model. In Section 5, we choose parameter values for simulations. In Section 6, we numerically examine how strongly aid “unpredictability” affects a recipient’s economic growth. Section 7 concludes our discussion.
نتیجه گیری انگلیسی
We examine the extent to which aid unpredictability affects a recipient country’s economic growth. In this analysis, we connect short-term aid fluctuation to its effects on a long-term change, economic growth. We measure the magnitude of the effects. We find that the effect is significant; due to unpredictability, one-fifth of aid is wasted. The loss can even reach as high as one-third of aid. The loss is rather sensitive to the extent of asymmetricity in the investment responses to shortfalls and windfalls of aid. Further, our results are related to a recent discussion on the effects of aid. Roodman, 2007 and Rajan and Subramanian, 2008, and others argue that aid does not significantly stimulate a recipient’s economic growth. Our results show that the ineffectiveness of aid, at least partially, arises from aid unpredictability. These results have important policy implications. The donor country can considerably improve aid efficiency by keeping their aid commitments. Even if it is impossibly difficult to keep the commitments, the donor can still significantly improve aid efficiency by reducing the asymmetricity of the investment response. CW point out that asymmetricity may be attributable to the timing of the aid disbursement. Aid tends to be disbursed at the end of a financial year. If aid were instead disbursed earlier, the recipient might be able to alter its investment plan, thereby reducing asymmetricity. With respect to extensions of this research, the subject of aid and governance is one of the most important issues. In this research, we assume that aid directly affects production. Meanwhile, aid may also affect a recipient country’s governance, and this governance may have an important influence on the relationship between aid and economic growth. For example, it may be possible that a large amount of aid hinders development of revenue-earning private sectors: a large amount of aid makes the country’s government heavily aid-dependent, and the government becomes less aggressive in development of revenue-earning private sectors. Thus, understanding the relationship between aid, economic growth, and governance would be an important extension of the present study. Aid’s short-term behavior is an interesting and very important subject. We hope that the study presented here will make some useful contributions to this field of research. Acknowledgments I would like to express my gratitude to the anonymous referees whose suggestions and comments are valuable. Responsibility for any errors in the analysis lies with the author alone.