Enhancing Effective Utilization of Aid in Fragile States

Sanjeev Gupta

No RP2008-07, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: This paper explores the macroeconomic implications of aid flows in countries with weak institutions. It argues that these countries should take into account their overall macroeconomic position, their capacity to absorb aid at the sectoral and subnational levels, and the strength of their fiscal institutions in deciding how much and how fast to spend aid. These considerations may warrant a gradual use of aid, except when aid is provided for humanitarian purposes.

Keywords: Economic assistance and foreign aid; Fiscal policy; Institutional economics; Macroeconomics (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:unu:wpaper:rp2008-07

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