Analysis of Deviations and Delays in Aid Disbursements

aid disbursement, aid commitment, donors, recipients, conditionality, instability, uncertainty

Public Finance and Economic Growth Empirical Evidence from Developing Countries

Fiscal policy, Public finance, Economic growth

Economics and Politics of Official Loans versus Grants Panoramic Issues and Empirical Evidence

aid, ODA, grants, official loans, soft loans, grant element, grace period, bilateral aid, multilateral aid

ANALYSIS OF DEVIATIONS AND DELAYS IN AID DISBURSEMENTS

The study seeks to identify donor-specific factors that cause donors to delay aid disbursement, and to apply a double standard in dealing with the non-compliance of a recipient with regard to aid conditionalities, a practice that promotes uncertainty in the receipt of aid. Annual panel data over 1970-2000 for the 22 members of OECD¡¯s DAC donor group are employed in the empirical study. Our findings suggest that the proportion of pledged aid being disbursed, which shows an increasing trend, is positively affected by the extent to which aid is procurement-tied and by the size of the donor government¡¯s expenditure in relation to GDP. On the other hand, the proportion of aid commitments being disbursed, which appears lower for the G7 countries, is negatively influenced by factors such as abundant donor generosity, the predominance of grants in total aid, the specific targeting of aid to lower-income recipients, high growth in donor economy, as well as high level of checks and balances, and polarization between the executive and legislative branches of government in the donor country.Aid Disbursement, Aid Commitment, Donors, Recipients, Conditionality, Instability, Uncertainty

The 'Pull' and 'Push' Factors in North-South Private Capital Flows: Conceptual Issues and Empirical Estimates

private capital flows, foreign direct investment, portfolio capital flows, export credits, developed countries, developing countries

Determinants of Income Inequality and its Effects on Economic Growth: Evidence from African Countries

Income distribution, Income inequality, Economic growth

Economics and politics of official loans versus grants: Panoramic issues and empirical evidence

The paper examines a wide range of issues relating to the mix between loans and grants as well as the degree of concessionality of loans. A number of empirical tests are carried out based on annual panel data over 1970 to 1999 for 22 donor countries and 72 recipient countries. Based on the tests, we are able to identify a number of economic and political factors that have influenced donors’ past decisions on the grant-loan mix. We also observe that for bilateral donors, past grant-loan mix (and, hence, reflows from past transfers) do not influence the volume of current resource transfers. In addition, we find that loans are better suited than grants in promoting recipient governments budgetary discipline, as is commonly understood in fiscal reform literature. Our tests also show that the rate of official borrowing by the recipients (and, by deduction, the extent of their past debt burden) is positively influenced by the extent of the concessionality of such loans—irrespective of whether it is in the form of subsidized interest rates or longer grace periods. The paper concludes with a review of the circumstances in which grants, soft loans and non-concessional loans might have their respective comparative advantage, as well as a discussion of the need, so as to overcome the negative incentive problems of soft loans, for a typical concessional loan package to be separated into two constituent parts. This would enable the recipient to be given the grant component and the option to take from the non-concessional loan component as much as desired. – aid ; ODA ; grants ; official loans ; soft loans ; grant element ; grace period ; bilateral aid ; multilateral ai

Analysis of deviations and delays in aid disbursements

The study seeks to identify donor-specific factors that cause donors to delay aid disbursement, and to apply a double standard in dealing with the non-compliance of a recipient with regard to aid conditionalities, a practice that promotes uncertainty in the receipt of aid. Annual panel data over 1970-2000 for the 22 members of OECD’s DAC donor group are employed in the empirical study. Our findings suggest that the proportion of pledged aid being disbursed, which shows an increasing trend, is positively affected by the extent to which aid is procurement-tied and by the size of the donor government’s expenditure in relation to GDP. On the other hand, the proportion of aid commitments being disbursed, which appears lower for the G7 countries, is negatively influenced by factors such as abundant donor generosity, the predominance of grants in total aid, the specific targeting of aid to lower-income recipients, high growth in donor economy, as well as high level of checks and balances, and polarization between the executive and legislative branches of government in the donor country

Aid Effort and its Determinants

determinants of aid efforts, generosity, ODA, DAC, donors, G7

Aid effort and its determinants

The paper empirically explores the factors that could have accounted for the generally declining aid effort (defined as the generosity ratio, or the share of GDP given as aid) of bilateral donors over the last three decades. Annual panel data over 1970-2000 period for the 22 DAC members are used in a series of regressions. The findings suggest the existence of progressivity of aid in relation to donor income. There is also evidence of the economies of scale, in the sense that the share of aid in income decreases with growth in the size of donor country population. Domestic pro-poor tendency also appears to enhance donor generosity, and a positive ‘peer pressure’ effect is also observed. In addition, the extent of military adventurism of the donor is observed to have enhanced aid effort, just as also the size of government. But no discernible effect is detected for fiscal balance. On the political front, a greater number of checks and balances in the political system as well as the existence of polarization and fractionalization within the government are found to have enhanced aid effort while fractionalization within the opposition has the opposite effect. On the other hand, no discernible and consistent effect of ideological orientation of government is detected. Finally, the movement in the aid effort over time is found to differ between the G7 and non-G7 donors