The Effect of Development Aid Unpredictability and Migrants’ Remittances on Fiscal Consolidation in Developing Countries

Sena Kimm Gnangnon ()

No 201210, Working Papers from CERDI

Abstract: We use panel data on seventy-four developing countries for the period 1980–2007 to examine the effects of aid unpredictability and migrants’ remittances on fiscal consolidation in these countries. Two definitions of fiscal adjustment are considered and a conditional logit model is used to perform the analysis. Evidence is shown that except for the case of low-income countries, remittances increase the likelihood of fiscal consolidation, be the latter gradual or rapid. Surprisingly, we observe that aid unpredictability, except in SSA countries where the effect is strongly positive and significant, does not affect the adoption of fiscal consolidation measures in all the groups considered.

Keywords: Remittances; Aid Unpredictability; Fiscal consolidation (search for similar items in EconPapers)
JEL-codes: C5 F20 F35 O23 (search for similar items in EconPapers)
Pages: 39
Date: 2012
New Economics Papers: this item is included in nep-mig
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Citations: View citations in EconPapers (2)

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