The Economics of Post Conflict Aid

James McHugh, Theodora Kosma and Dimitri Demekas

No 2002/198, IMF Working Papers from International Monetary Fund

Abstract: Post conflict aid is different from conventional development aid and has different effects on the recipient economy. The paper builds a theoretical model tailored around the main stylized facts of post conflict aid and traces the impact of different kinds of post-conflict aid on capital accumulation, growth, welfare, and resource allocation. While both humanitarian and reconstruction aid are welfare-enhancing, humanitarian aid reduces long-run capital accumulation and growth. Reconstruction aid, on the other hand, may increase the long-run capital stock and, if carefully designed, avoid the pitfalls of the Dutch disease.

Keywords: WP; capital stock (search for similar items in EconPapers)
Pages: 36
Date: 2002-11-01
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Citations: View citations in EconPapers (9)

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