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Aid and Income Stabilization

Sylviane Guillaumont Jeanneney and Sampawende Tapsoba
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Sylviane Guillaumont Jeanneney: CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique

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Abstract: The potential stabilization of output shocks through official assistance flows is investigated is this paper. It contributes to the current debate on aid instability and argues that official assistance might cope with exogenous output shocks in recipient countries and stabilize resources available for national expenditure, including consumption and investment. High aid dependency and vulnerability to output shocks positively affect the stabilization property of aid. Contrasting with the current literature, the paper documents that aid volatility is not a significant determinant of the stabilizing or destabilizing impact of aid.

Keywords: cerdi (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (14)

Published in Review of Development Economics, 2012, 16 (2), pp.216-229. ⟨10.1111/j.1467-9361.2012.00657.x⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00690363

DOI: 10.1111/j.1467-9361.2012.00657.x

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