Aid, Public Sector Fiscal Behaviour and Developing Country Debt

Simon Feeny and Mark McGillivray

No DP2002-40, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: This paper looks at public sector debt in developing countries, being concerned specifically with the relationship between aid inflows and the public sector borrowing requirement net of aid loans. After examining the public sector budget constraint and various conditions under which aid might lead to an increase in this borrowing, the paper surveys the empirical results of literature on aid and public sector fiscal behaviour. It finds that the results of a number of studies are consistent with aid leading to increases in this borrowing.

Keywords: Public debt; Economic assistance and foreign aid; Fiscal policy; Government spending policy (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Aid, Public Sector Fiscal Behaviour and Developing Country Debt (2010)
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