Constraints to Achieving the MDGs with Scaled-Up Aid

François Bourguignon and Mark Sundberg

Working Papers from United Nations, Department of Economics and Social Affairs

Abstract: This paper examines the macroeconomic and structural constraints to scaling up aid flows to developing countries to meet the Millennium Development Goals in 2015, including infrastructure, competitiveness and the real exchange rate, labour markets, fiscal constraints, governance, and aid volatility and fragmentation. The impact of these constraints on cost-efficient sequencing and composition of scaled-up aid flows is considered, using a dynamic computable general equilibrium model applied to Ethiopia. The main conclusions are that: (i) accelerating growth through productivity-enhancing infrastructure investment (and improved governance) is key to achieving the MDGs; (ii) large increases in aid risk undermining competitiveness and future growth; and (iii) skilled labour constraints require careful aid sequencing that limit the scope for frontloading.

Keywords: Millennium Development Goals (MDGs); aid effectiveness; scaling up aid; absorptive capacity. (search for similar items in EconPapers)
JEL-codes: O11 O12 O21 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2006-03
New Economics Papers: this item is included in nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:une:wpaper:15

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