The Fiscal Effects of Aid in Ethiopia: Evidence from CVAR Applications

Giulia Mascagni and Emilija Timmis

Journal of Development Studies, 2017, vol. 53, issue 7, 1037-1056

Abstract: This article explores the fiscal effects of aid in Ethiopia using the Cointegrated Vector Auto-Regressive (CVAR) methodology to model complex long-run and short-run dynamics. We use national data for 1961–2010, including a measure of aid capturing flows through the budget as measured by the recipient. The data suggests three main conclusions on the long-run equilibrium. First, government long-term spending plans are based on domestic sources, treating aid as an additional source of revenue. Second, both grants and loans are positively related to tax revenue. Third, aid is positively associated with spending, with a particularly strong relation between capital expenditure and grants. Overall, our results show that aid in Ethiopia had beneficial fiscal effects.

Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
http://hdl.handle.net/10.1080/00220388.2017.1303676 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Fiscal Effects of Aid in Ethiopia: Evidence from CVAR applications (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jdevst:v:53:y:2017:i:7:p:1037-1056

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/FJDS20

DOI: 10.1080/00220388.2017.1303676

Access Statistics for this article

Journal of Development Studies is currently edited by Howard White, Oliver Morrissey and Ken Shadlen

More articles in Journal of Development Studies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().