 How Volatile and Unpredictable Are Aid Flows, and What Are the Policy Implications?A. Javier Hamann () and Ales Bulir No 2001/167, IMF Working Papers from International Monetary Fund Abstract: This paper examines empirical evidence on the volatility and uncertainty of aid flows, and the main policy implications. Aid is found to be more volatile than fiscal revenues- particularly in highly aid-dependent countries-and mildly procyclical in relation to activity in the recipient country. These findings imply that the current pattern of aid disbursements is welfare-reducing. We also find that uncertainty about aid disbursements is large and that the information content of commitments made by donors is either very small or statistically insignificant. Policies to cope with these features of aid, as well as broader international efforts to reduce the volatility and procyclicality of aid, are briefly discussed. Keywords: WP; disbursement; country; correlation coefficient; IMF-program projection; external aid; volatility; predictability; IMF-supported programs; program aid; IMF country desk economist; aid disbursement; recipient country; aid-to-revenue ratio; rank correlation correlation coefficient; donor country; reform effort; IMF program projection; Aid flows; Loans; Budget planning and preparation; Exchange rates; Sub-Saharan Africa (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2001/167 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC. |
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