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  1. AID crowd-out
    the effect of ngos on government-provided public services
    Published: 13 May 2020
    Publisher:  Centre for Economic Policy Research, London

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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Series: Array ; DP14755
    Subjects: Foreign Aid; Aid Effectiveness
    Scope: 1 Online-Ressource (circa 69 Seiten), Illustrationen
  2. Mission drawdowns - financing a sustainable peace
    sustaining gains and supporting economic stability post un mission withdrawal
    Published: [2020]
    Publisher:  OECD Publishing, [Paris, France]

    Successful transitions are vital; providing the means to secure the gains achieved through UN missions. A carefully managed transition process is one of the best ways to guard against backslide and to ensure the continuity of essential peacebuilding... more

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    Successful transitions are vital; providing the means to secure the gains achieved through UN missions. A carefully managed transition process is one of the best ways to guard against backslide and to ensure the continuity of essential peacebuilding and conflict prevention efforts. As part of this, it will be important to build and reinforce the essential foundations for economic stability, and to maintain financing for peace programming post-withdrawal. Therefore, the overall objective of this research was to address the systemic challenges of financing UN Mission transitions, by outlining opportunities to ensure that: the potentially negative economic impacts and disruptions of UN Mission transitions are mitigated; financing for peacebuilding programmes is sustained post mission withdrawal; and domestic economic growth is sustained and supported where possible. This paper combines global trends and research on peace operation transitions with findings from case studies in DRC (initial stages of MONUSCO transition), Haiti (handover from MINUJUSH to BINUH), Liberia (following UNMIL’s withdrawal) and Sudan (transition of UNAMID). The paper focuses on opportunities that the international community could integrate into programming, co-ordination and financing. Accordingly, the paper is structured around the three phases of transition – ongoing UN missions, the transition, and sustaining capacity and economic stability post-withdrawal.

     

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    Source: Staatsbibliothek zu Berlin
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    Series: OECD development policy papers ; no. 28 (March 2020)
    Subjects: Development; Congo, the Democratic Republic of the; Haiti; Liberia; Sudan; Peacekeeping; United Nations; UN missions; Transition; Special Political Mission; ODA; Foreign Aid; Policy; Developing Countries; Fragility; Financing; Stability; INCAF
    Scope: 1 Online-Ressource (circa 65 Seiten), Illustrationen
  3. Doing more with less
    how can Brazil foster development while pursuing fiscal consolidation?
    Published: 2019
    Publisher:  International Monetary Fund, [Washington, DC]

    Following a benchmarking exercise, we estimate the spending required to reach satisfactory progress in the Sustainable Development Goals in the health, education, and infrastructure sectors in Brazil. We find that there is room for savings in... more

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    Following a benchmarking exercise, we estimate the spending required to reach satisfactory progress in the Sustainable Development Goals in the health, education, and infrastructure sectors in Brazil. We find that there is room for savings in education (up to 1.5 percentage point of GDP) and health (up to 2.5 percentage points of GDP) without compromising the quality of services but additional investments for over 3 percent of GDP per year are needed to close large infrastructure gaps in roads, water, and electricity by 2030. Brazil can do more with less, but increasing efficiency of public spending will require substantial reforms

     

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  4. Reduziert Entwicklungshilfe Migration?
    Published: [2023]
    Publisher:  Kiel Institut für Weltwirtschaft - Leibniz Zentrum zur Erforschung globaler ökonomischer Herausforderungen, Kiel, Germany

    Der weit verbreitete Einsatz von Entwicklungshilfe zur Bekämpfung von "Fluchtursachen" oder, präziser formuliert, irregulärer Migration, entbehrt einer soliden empirischen Grundlage. In einer neuen Studie (Fuchs, A., A. Groeger, T. Heidland, and L.... more

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    Der weit verbreitete Einsatz von Entwicklungshilfe zur Bekämpfung von "Fluchtursachen" oder, präziser formuliert, irregulärer Migration, entbehrt einer soliden empirischen Grundlage. In einer neuen Studie (Fuchs, A., A. Groeger, T. Heidland, and L. Wellner (2023). The Effect of Foreign Aid on Migration: Global Micro-Evidence from World Bank Projects. Kiel Working Paper 2257), die wir hier für ein breiteres Publikum zusammenfassen, liefern wir die erste umfassende Kausalanalyse, die Evidenz auf Mikroebene für alle Entwicklungsländer untersucht, welche zwischen 2008 und 2019 von der Weltbank unterstützt wurden. Unsere Analyse ist die erste, die die Auswirkungen der Entwicklungshilfe auf verschiedene Aspekte der Migration aufschlüsselt: die Aspirationen, Möglichkeiten (sog. Capabilities) zur Migration und tatsächlicher Migration. Im Einklang mit der Idee, dass Entwicklungshilfe die Ursachen der irregulären Migration reduziert, zeigt unsere Studie, dass die Ankündigung und Umsetzung von Entwicklungshilfeprojekten die Migrationsaspirationen von Menschen in Empfängerländern deutlich reduziert. Dieser Effekt ist vorübergehender Natur und tritt nicht in fragilen Ländern auf. Für die langfristige Betrachtung des Effekts von Entwicklungshilfe auf Migration ist der entscheidende Faktor, ob Entwicklungshilfe letztlich die Lebensbedingungen verbessert, was jedoch auch Migrationsmöglichkeiten verbessern kann. Unsere Ergebnisse liefern einen Beleg dafür, dass dies der Fall ist. Wichtig anzumerken ist jedoch, dass zusätzliche Migration in regulären Kanälen stattfindet. Diese Ergebnisse sind für politische Entscheidungsträger von erheblicher Bedeutung, wie wir am Ende dieses Beitrags erläutern. The widespread use of foreign aid to address the "root causes" of irregular migration lacks a robust empirical foundation. In a new study (Fuchs, A., A. Groeger, T. Heidland, and L. Wellner (2023). The Effect of Foreign Aid on Migration: Global Micro-Evidence from World Bank Projects. Kiel Working Paper 2257) that we summarize here for a wider audience, we provide the first comprehensive causal analysis that examines micro-level evidence across all developing countries that received assistance from the World Bank between 2008 and 2019. Our analysis is the first to disentangle the impacts of foreign aid on various aspects of migration: individuals' aspirations, capabilities, and actual migration patterns. In alignment with the notion of utilizing aid to mitigate the root causes of irregular migration, our study reveals that the announcements and disbursements of new aid projects significantly reduce people's migration aspirations. This effect is temporary in nature and is notably absent in fragile countries. Over the longer term, the critical factor is whether aid ultimately enhances living conditions. Our findings provide some evidence supporting this, as improvements in living conditions bolster individuals' capabilities. This can lead to increased migration, yet the notable difference is that these individuals tend to follow regular channels for migration. These findings hold substantial significance for policymakers and those involved in foreign aid allocation that we discuss towards the end of this policy brief.

     

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    Source: Union catalogues
    Language: German
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/279516
    Series: Kiel policy brief ; Nr. 169 (October 2023)
    Subjects: Entwicklungshilfe; Fluchtursachen; Irreguläre Migration; Flüchtlinge; Asyl; Entwicklung; Migration; Foreign Aid; Root causes; Irregular migration; Refugees; Asylum; Development
    Scope: 1 Online-Ressource (circa 16 Seiten), Illustrationen
  5. Institution transfers, the Marshall Plan, Europe, and Ukraine
    an analytical narrativ
    Published: [2023]
    Publisher:  Friedrich Schiller University Jena, Faculty of Economics and Business Administration, Jena, Germany

    This paper offers an analytical narrative based on an assurance game with two separate populations in an evolutionary setting. In our model, Donors and Recipients are two populations; let us call them Europe and Ukraine. The donor population has two... more

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    This paper offers an analytical narrative based on an assurance game with two separate populations in an evolutionary setting. In our model, Donors and Recipients are two populations; let us call them Europe and Ukraine. The donor population has two types. A proportion of this population wants to promote a Marshall Plan-type model for the recipient state, and another prefers isolationism. A proportion of the population of the recipient state also intends to coordinate a Marshall Plan-type economic integration. In contrast, others prefer foreign aid but view further integration as a violation of sovereignty (or, with Ukraine, may be afraid of further Russian attacks from this integration). Marshall plan type coordination provides the highest payoffs through, e.g., the peace dividend, better institutions in Ukraine, widened European integration trade links, or global financial integration. Coordination is costly because it requires substantial institutional change on both sides. We use simulations to track outcomes given that European support for Ukraine and Ukrainian desire for aid may be endogenous. Further, we show how these endogenous outcomes respond to political shocks in Europe that affect European support for Ukraine and implicitly the lack of support for Ukraine.

     

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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
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    hdl: 10419/283188
    Series: Jena economic research papers ; # 2023, 017
    Subjects: Institutional Transfer; Institutional Coordination; Evolutionary Game Theory; Ukraine War; Foreign Aid
    Scope: 1 Online-Ressource (circa 17 Seiten), Illustrationen
  6. Does foreign aid reduce migration?
    Published: [2023]
    Publisher:  Kiel Institute for the World Economy - Leibniz Center for Research on Global Economic Challenges, Kiel, Germany

    The widespread use of foreign aid to address the "root causes" of irregular migration lacks a robust empirical foundation. In a new study (Fuchs, A., A. Groeger, T. Heidland, and L. Wellner (2023). The Effect of Foreign Aid on Migration: Global... more

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    DS 232
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    The widespread use of foreign aid to address the "root causes" of irregular migration lacks a robust empirical foundation. In a new study (Fuchs, A., A. Groeger, T. Heidland, and L. Wellner (2023). The Effect of Foreign Aid on Migration: Global Micro-Evidence from World Bank Projects. Kiel Working Paper 2257) that we summarize here for a wider audience, we provide the first comprehensive causal analysis that examines micro-level evidence across all developing countries that received assistance from the World Bank between 2008 and 2019. Our analysis is the first to disentangle the impacts of foreign aid on various aspects of migration: individuals' aspirations, capabilities, and actual migration patterns. In alignment with the notion of utilizing aid to mitigate the root causes of irregular migration, our study reveals that the announcements and disbursements of new aid projects significantly reduce people's migration aspirations. This effect is temporary in nature and is notably absent in fragile countries. Over the longer term, the critical factor is whether aid ultimately enhances living conditions. Our findings provide some evidence supporting this, as improvements in living conditions bolster individuals' capabilities. This can lead to increased migration, yet the notable difference is that these individuals tend to follow regular channels for migration. These findings hold substantial significance for policymakers and those involved in foreign aid allocation that we discuss towards the end of this policy brief. Der weit verbreitete Einsatz von Entwicklungshilfe zur Bekämpfung von "Fluchtursachen" oder, präziser formuliert, irregulärer Migration, entbehrt einer soliden empirischen Grundlage. In einer neuen Studie (Fuchs, A., A. Groeger, T. Heidland, and L. Wellner (2023). The Effect of Foreign Aid on Migration: Global Micro-Evidence from World Bank Projects. Kiel Working Paper 2257), die wir hier für ein breiteres Publikum zusammenfassen, liefern wir die erste umfassende Kausalanalyse, die Evidenz auf Mikroebene für alle Entwicklungsländer untersucht, welche zwischen 2008 und 2019 von der Weltbank unterstützt wurden. Unsere Analyse ist die erste, die die Auswirkungen der Entwicklungshilfe auf verschiedene Aspekte der Migration aufschlüsselt: die Aspirationen, Möglichkeiten (sog. Capabilities) zur Migration und tatsächlicher Migration. Im Einklang mit der Idee, dass Entwicklungshilfe die Ursachen der irregulären Migration reduziert, zeigt unsere Studie, dass die Ankündigung und Umsetzung von Entwicklungshilfeprojekten die Migrationsaspirationen von Menschen in Empfängerländern deutlich reduziert. Dieser Effekt ist vorübergehender Natur und tritt nicht in fragilen Ländern auf. Für die langfristige Betrachtung des Effekts von Entwicklungshilfe auf Migration ist der entscheidende Faktor, ob Entwicklungshilfe letztlich die Lebensbedingungen verbessert, was jedoch auch Migrationsmöglichkeiten verbessern kann. Unsere Ergebnisse liefern einen Beleg dafür, dass dies der Fall ist. Wichtig anzumerken ist jedoch, dass zusätzliche Migration in regulären Kanälen stattfindet. Diese Ergebnisse sind für politische Entscheidungsträger von erheblicher Bedeutung, wie wir am Ende dieses Beitrags erläutern.

     

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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/279437
    Series: Kiel policy brief ; no. 169 (October 2023)
    Subjects: Foreign Aid; Root causes; Irregular migration; Refugees; Asylum; Development; Migration; Entwicklungshilfe; Fluchtursachen; Irreguläre Migration; Flüchtlinge; Asyl; Entwicklung
    Scope: 1 Online-Ressource (circa 15 Seiten), Illustrationen
  7. German aid allocation and partner country selection
    development-orientation, self-interests and path dependency
    Published: 2012
    Publisher:  DIE, Bonn

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  8. Managing reductions in aid inflows
    assessing policy choices in Haiti
    Published: 2018
    Publisher:  International Monetary Fund, [Washington, D.C.]

    A low-income country such as Haiti that confronts an environment of diminishing aid inflows must assess tradeoffs among the available policy options: spending cuts, monetization, sales of debt, or use of foreign reserves. To provide the analytical... more

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    A low-income country such as Haiti that confronts an environment of diminishing aid inflows must assess tradeoffs among the available policy options: spending cuts, monetization, sales of debt, or use of foreign reserves. To provide the analytical tools for this task, the paper draws from a set of DSGE models recently developed to evaluate policy choices in low-income countries for which external aid flows represent an important revenue source. Two simplified stylized variations of the main model are used to gain intuition and initially assess the trdeaoffs. Subsequenctly a full-scale small open economy DSGE model, calibrated to match conditions in Haiti and in similar low-income countries, is employed. Several key results are common to all model versions. While sales of foreign exchange reserves can compensate for the loss of aid inflows, this strategy is not sustainable. The remaining policy choices entail larger welfare costs, involving lower consumption levels and real depreciation. The results suggest that a mixture of spending cuts and depreciation is the best strategy, when use of foreign reserves is constrained

     

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  9. Seychelles
    request for purchase under the rapid financing instrument : press release; staff report; and statement by the Executive Director for Seychelles
    Published: 2020
    Publisher:  International Monetary Fund, Washington, D.C.

    This paper refers to Seychelles' Request for Purchase Under the Rapid Financing Instrument (RFI). The near-term economic fallout of the coronavirus disease 2019 pandemic is expected to be severe. Restriction in travel will hinder tourism and weaken... more

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    This paper refers to Seychelles' Request for Purchase Under the Rapid Financing Instrument (RFI). The near-term economic fallout of the coronavirus disease 2019 pandemic is expected to be severe. Restriction in travel will hinder tourism and weaken fiscal and external positions, creating large additional financing needs. The authorities reacted swiftly by taking immediate measures of containment, including border closures, strengthening health policy responses and supporting households and firms. The emergency IMF support under the RFI provides timely resources to the authorities to address the urgent balance of payments and budgetary needs. The assistance of other international financial institutions and development partners is crucial to close the remaining financing gaps, ease the adjustment burden, and preserve economic growth. The authorities are committed to transparency and good governance in the use of emergency financing by providing monthly reports of pandemic-related expenditure to the National Assembly and undertaking an independent audit of such spending and procurement and publishing the results

     

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  10. Jordan
    request for purchase under the rapid financing instrument : press release; staff report; and statement by the Executive Director, Alternate Executive Director, and Advisor for Jordan
    Published: 2020
    Publisher:  International Monetary Fund, Washington, D.C.

    This paper discusses Jordan's Request for Purchase Under the Rapid Financing Instrument (RFI). The coronavirus disease 2019 pandemic has had a severe impact on the Jordanian people's lives and on the economy. Tourism disruption and sharp declines in... more

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    This paper discusses Jordan's Request for Purchase Under the Rapid Financing Instrument (RFI). The coronavirus disease 2019 pandemic has had a severe impact on the Jordanian people's lives and on the economy. Tourism disruption and sharp declines in remittances, exports and capital inflows have resulted in an urgent balance of payments need. The Jordanian authorities have responded with decisive containment and health measures that effectively limited the spread of the virus with minimal fatalities. They also implemented a timely package of policies to mitigate the economic fallout of the pandemic. IMF financing under the RFI will support international reserves and help meet the budget financing needs for crisis mitigation. Mobilizing additional financing from multilateral and bilateral creditors will be essential to support the authorities' policy efforts and preserve macroeconomic stability. The authorities remain committed to the objectives of the reform program supported by the Extended Fund Facility arrangement, which was approved by the Board in March. When the crisis abates, the priority will be resuming fiscal consolidation to place public debt on a declining path and pursuing reforms to strengthen the competitiveness of the Jordanian economy and to support inclusive growth and job creation

     

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  11. The Federal Democratic Republic of Ethiopia
    requests for purchasing under the rapid financing instrument, debt relief under the catastrophe containment and relief trust, rephasing of access under the three-year arrangements under the extended credit facility and the extended fund facility, and reduction of access under the extended fund facility arrangement : press release; staff report; and statement by the Executive Director for The Federal Democratic Republic of Ethiopia
    Published: 2020
    Publisher:  International Monetary Fund, Washington, D.C.

    This paper focuses on The Federal Democratic Republic of Ethiopia's Requests for Purchasing Under the Rapid Financing Instrument (RFI), Debt Relief Under the Catastrophe Containment and Relief Trust, Rephasing of Access Under the Three-Year... more

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    This paper focuses on The Federal Democratic Republic of Ethiopia's Requests for Purchasing Under the Rapid Financing Instrument (RFI), Debt Relief Under the Catastrophe Containment and Relief Trust, Rephasing of Access Under the Three-Year Arrangements Under the Extended Credit Facility and the Extended Fund Facility, and Reduction of Access Under the Extended Fund Facility Arrangement. Ethiopia is facing a pronounced economic slowdown and an urgent balance of payments need owing to the coronavirus disease 2019 (COVID-19) pandemic. The authorities have taken strong actions to contain the health impact by implementing a mandatory 14-day quarantine for travelers entering the country, improving testing and containment capacity, strengthening epidemic response coordination and adopting a state of emergency to limit movement and gatherings and facilitate social distancing. Ethiopia showed good progress under the extended arrangements with the IMF, which aim to address external vulnerabilities and transition to a private sector-led growth model. The authorities remain committed to the reform program. The IMF staff supports the authorities' plan to accommodate COVID-related fiscal measures, and to resume the fiscal adjustment when the crisis subsides. In order to contain the upward pressure on public debt, the authorities should consider further tightening the spending envelope for state-owned enterprises not directly engaged in the COVID-19 emergency response

     

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  12. Dominican Republic
    request for purchase under the rapid financing instrument : press release; staff report; and statement by the Executive Director for the Dominican Republic
    Published: 2020
    Publisher:  International Monetary Fund, Washington, D.C.

    This paper analyzes Dominican Republic's Request for Purchase Under the Rapid Financing Instrument (RFI). The RFI provides timely resources to the authorities which they intend to mobilize for essential coronavirus disease 2019 (COVID-19)-related... more

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    This paper analyzes Dominican Republic's Request for Purchase Under the Rapid Financing Instrument (RFI). The RFI provides timely resources to the authorities which they intend to mobilize for essential coronavirus disease 2019 (COVID-19)-related health expenditure and support to the vulnerable population. The pandemic has significantly weakened the Dominican Republic's macroeconomic outlook for 2020 and created financing needs that require additional support. The authorities are also seeking support from other multilateral institutions. Macroeconomic and financial policies have been accommodative in response to the pandemic. The temporary fiscal measures to accommodate higher public healthcare spending and targeted transfers to the most vulnerable are appropriate. The IMF emergency assistance under the RFI is expected to help provide the much-needed resources to address the urgent balance of payments needs and support essential COVID-19-related health expenditure. The support of other international financial institutions and development partners would be crucial to close the remaining financing gaps, ease the adjustment burden, and preserve the Dominican Republic's dynamic economic growth

     

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  13. United Republic of Tanzania
    request for disbursement under the rapid credit facility : press release; staff report; and statement by the Executive Director United Republic of Tanzania
    Published: December 2021
    Publisher:  International Monetary Fund, Washington, D.C.

    The COVID-19 pandemic has negatively impacted Tanzania's macroeconomic outlook. The Tanzanian authorities are implementing a comprehensive emergency pandemic response plan to help mitigate the significant socioeconomic and health effects of the... more

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    The COVID-19 pandemic has negatively impacted Tanzania's macroeconomic outlook. The Tanzanian authorities are implementing a comprehensive emergency pandemic response plan to help mitigate the significant socioeconomic and health effects of the crisis, resulting in an ongoing urgent balance of payments need

     

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  14. IMF programs and financial flows to offshore centers
    Published: May 2021
    Publisher:  International Monetary Fund, [Washington, D.C.]

    This paper examines whether IMF lending is associated with increases in outflows to offshore financial centers (OFCs), known for bank secrecy and asset protection, relative to other international destinations. Using quarterly data from the BIS on... more

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    This paper examines whether IMF lending is associated with increases in outflows to offshore financial centers (OFCs), known for bank secrecy and asset protection, relative to other international destinations. Using quarterly data from the BIS on bilateral bank deposits, we are unable to detect any positive and statistically significant effect of IMF loan disbursements on bank deposits in OFCs. The result holds even after restricting the sample to the duration of the IMF program, where disbursement quarters and non-disbursement quarters should be subject to similar degrees of macroeconomic stress. It is also robust to using the scheduled tranche of disbursements as an instrument for actual disbursements. While the effects vary by the type and conditionality of the IMF program, as well as the amount of lending, none of the effects are found to be positive and statistically significant. We also estimate whether the recent surge in emergency lending, during the Covid-19 crisis, is associated with an increase in outflows to OFCs but find no evidence to support this

     

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  15. Has Chinese aid benefited recipient countries?
    evidence from a meta-regression analysis
    Published: 2022 FEB
    Publisher:  International Monetary Fund, [Washington, D.C.]

    This paper employs a meta-regression analysis of 473 estimates from 15 studies to take stock of the empirical literature on Chinese aid effectiveness. After accommodating publication selection bias, we find that, on average, Beijing's foreign... more

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    This paper employs a meta-regression analysis of 473 estimates from 15 studies to take stock of the empirical literature on Chinese aid effectiveness. After accommodating publication selection bias, we find that, on average, Beijing's foreign assistance has had a positive impact on economic and social outcomes in recipient countries but an opposite effect on governance, albeit negligible in size. We also show that (i) studies that fail to uncover statistically significant effects are less likely to be submitted to journals, or accepted for publication; and (ii) results are not driven by authors' institutional affiliation. Differences in study characteristics such as the type of development outcome considered, how the Chinese aid variable is measured, the geographic region under study, and publication outlet explain the heterogeneity among Chinese aid effectiveness estimates reported in the literature

     

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  16. Fiscal policy and development
    human, social, and physical investment for the SDGs
    Published: 2019
    Publisher:  International Monetary Fund, [Washington, D.C.]

    The goal of this paper is to estimate the additional annual spending required for meaningful progress on the SDGs in these areas. Our estimates refer to additional spending in 2030, relative to a baseline of current spending to GDP in these sectors.... more

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    The goal of this paper is to estimate the additional annual spending required for meaningful progress on the SDGs in these areas. Our estimates refer to additional spending in 2030, relative to a baseline of current spending to GDP in these sectors. Toward this end, we apply an innovative costing methodology to a sample of 155 countries: 49 low- income developing countries, 72 emerging market economies, and 34 advanced economies. And we refine the analysis with five country studies: Rwanda, Benin, Vietnam, Indonesia, and Guatemala

     

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  17. Efficiency-adjusted public capital, capital grants, and growth
    Published: July 2017
    Publisher:  International Monetary Fund, [Washington, D.C.]

    Recent literature has explored the relationship between efficiency-adjusted public capital and economic growth. A debate on whether capital grants, and especially EU funds actually contribute to growth has gained prominence lately. This paper... more

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    Recent literature has explored the relationship between efficiency-adjusted public capital and economic growth. A debate on whether capital grants, and especially EU funds actually contribute to growth has gained prominence lately. This paper empirically assesses the relationship between the quality of public investment, capital grants, and growth in a sample of 43 emerging and peripheral economies over 1991-2015. To this end, the contribution of public capital to growth is estimated using efficiency-adjusted public capital stock series, constructed reflecting the quality of public investment management institutions. In addition, the determinants of effective public investment are analyzed. The results suggest that capital grants contribute positively to effective public investment, and the latter is significant in explaining variations in economic growth. Finally, the paper illustrates the impact of raising EU funds absorption on potential growth in emerging and peripheral EU countries

     

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  18. What does aid do to fiscal policy?
    new evidence
    Published: June 2016
    Publisher:  International Monetary Fund, [Washington, D.C.]

    Foreign aid is a sizable source of government financing for several developing countries and its allocation matters for the conduct of fiscal policy. This paper revisits fiscal effects of shifts in aid dependency in 59 developing countries from 1960... more

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    Foreign aid is a sizable source of government financing for several developing countries and its allocation matters for the conduct of fiscal policy. This paper revisits fiscal effects of shifts in aid dependency in 59 developing countries from 1960 to 2010. It identifies structural shifts in aid dependency: upward shifts (structural increases in aid inflows) and downward shifts (structural decreases in aid inflows). These shifts are treated as shocks in aid dependency and treatment effect methods are used to assess the fiscal effects of aid. It finds that shifts in aid dependency are frequent and have significant fiscal effects. In addition to traditional evidence of tax displacement and 'aid illusion,' we show that upward shifts and downward shifts in aid dependency have asymmetric effects on the fiscal accounts. Large aid inflows undermine tax capacity and public investment while large reductions in aid inflows tend to keep recipients' tax and expenditure ratios unchanged. Moreover, the tax displacement effects tend to be temporary while the impact on expenditure items are persistent. Finally, we find that the undesirable fiscal effects of aid are more pronounced in countries with low governance scores and low absorptive capacity, as well as those with IMF-supported programs

     

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  19. Does conditionality mitigate the potential negative effect of aid on revenues?
    Published: July 2016
    Publisher:  International Monetary Fund, [Washington, D.C.]

    This paper assesses whether conditionality in IMF-supported programs has helped offset the potential negative effect of foreign aid on tax revenues. The analysis-carried out on panel data covering 1993-2012 for 111 low- and middle-income... more

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    This paper assesses whether conditionality in IMF-supported programs has helped offset the potential negative effect of foreign aid on tax revenues. The analysis-carried out on panel data covering 1993-2012 for 111 low- and middle-income countries-shows that growing use of revenue conditionality by low-income countries partially offsets the depressing effect of foreign grants on tax revenue, particularly on taxes on goods and services. The impact of conditionality is strong in countries where aid dependence is high and where institutions are strong, suggesting that revenue conditionality cannot substitute for weak institutions in mitigating the negative effect of aid on tax revenue collection

     

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  20. Natural disasters
    mitigating impact, managing risks
    Published: 2012
    Publisher:  International Monetary Fund, Washington, D.C

    This paper reviews the literature on the macroeconomic impact of natural disasters and presents the IMF’s role in assisting countries coping with natural catastrophes. Focusing on seven country cases, the paper describes the emergency financing,... more

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    This paper reviews the literature on the macroeconomic impact of natural disasters and presents the IMF’s role in assisting countries coping with natural catastrophes. Focusing on seven country cases, the paper describes the emergency financing, policy support, and technical assistance provided by the Fund to help governments put together a policy response or build a macro framework to lay the foundation for recovery and/or unlock other external financing. The literature and experience suggests there are ways to strengthen policy frameworks to increase resilience to natural disaster shocks, including identifying the risks and probability of natural disasters and integrating them more explicitly into macro frame-works, increasing flexibility within fiscal frameworks, and improving coordination amongst international partners ex post and ex ante

     

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  21. Aid and growth at the regional level
    Published: 2015
    Publisher:  International Monetary Fund, Washington, D.C

    This paper brings the aid effectiveness debate to the sub-national level. We hypothesize the nonrobust results regarding the effects of aid on development in the previous literature to arise due to the effects of aid being insufficiently large to... more

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    This paper brings the aid effectiveness debate to the sub-national level. We hypothesize the nonrobust results regarding the effects of aid on development in the previous literature to arise due to the effects of aid being insufficiently large to measurably affect aggregate outcomes. Using geocoded data for World Bank aid to a maximum of 2,221 first-level administrative regions (ADM1) and 54,167 second-level administrative regions (ADM2) in 130 countries over the 2000-2011 period, we test whether aid affects development, measured as nighttime light growth. Our preferred identification strategy exploits variation arising from interacting a variable that indicates whether or not a country has passed the threshold for receiving IDA's concessional aid with a recipient region's probability to receive aid, in a sample of 478 ADM1 regions and almost 8,400 ADM2 regions from 21 countries. Controlling for the levels of the interacted variables, the interaction provides a powerful and excludable instrument. Overall, we find significant correlations between aid and growth in ADM2 regions, but no causal effects

     

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  22. Enhancing macroeconomic resilience to natural disasters and climate change in the small states of the Pacific
    Published: 2015
    Publisher:  International Monetary Fund, Washington, D.C

    Natural disasters and climate change are interrelated macro-critical issues affecting all Pacific small states to varying degrees. In addition to their devastating human costs, these events damage growth prospects and worsen countries' fiscal... more

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    Natural disasters and climate change are interrelated macro-critical issues affecting all Pacific small states to varying degrees. In addition to their devastating human costs, these events damage growth prospects and worsen countries' fiscal positions. This is the first cross-country IMF study assessing the impact of natural disasters on growth in the Pacific islands as a group. A panel VAR analysis suggests that, for damage and losses equivalent to 1 percent of GDP, growth drops by 0.7 percentage point in the year of the disaster. We also find that, during 1980-2014, trend growth was 0.7 percentage point lower than it would have been without natural disasters. The paper also discusses a multi-pillar framework to enhance resilience to natural disasters at the national, regional, and multilateral levels and the importance of enhancing countries' risk-management capacities. It highlights how this approach can provide a more strategic and less ad hoc framework for strengthening both ex ante and ex post resilience and what role the IMF can play

     

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  23. Macroeconomic outcomes in disaster-prone countries
    Published: 2019
    Publisher:  International Monetary Fund, [Washington, DC]

    Using a dynamic stochastic general equilibrium model, we study the channels through which natural disaster shocks affect macroeconomic outcomes and welfare in disaster-prone countries. We solve the model using Taylor projection, a solution method... more

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    Using a dynamic stochastic general equilibrium model, we study the channels through which natural disaster shocks affect macroeconomic outcomes and welfare in disaster-prone countries. We solve the model using Taylor projection, a solution method that is shown to deal effectively with high-impact weather shocks calibrated in accordance to empirical evidence. We find large and persistent effects of weather shocks that significantly impact the income convergence path of disaster-prone countries. Relative to non-disaster-prone countries, on average, these shocks cause a welfare loss equivalent to a permanent fall in consumption of 1.6 percent. Welfare gains to countries that self-finance investments in resilient public infrastructure are found to be negligible, and international aid has to be sizable to achieve significant welfare gains. In addition, it is more cost-effective for donors to contribute to the financing of resilience before the realization of disasters, rather than disbursing aid after their realization

     

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  24. Natural disaster insurance for sovereigns
    issues, challenges and optimality
    Published: 2020
    Publisher:  International Monetary Fund, [Washington, DC]

    Natural disasters are a source of economic risks in many countries, especially in smaller and lower-income states, and ex-ante preparedness is needed to manage the risks. The paper discusses sovereign experience with disaster insurance as a key... more

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    Natural disasters are a source of economic risks in many countries, especially in smaller and lower-income states, and ex-ante preparedness is needed to manage the risks. The paper discusses sovereign experience with disaster insurance as a key instrument to mitigate the risks; proposes ways to judge the adequacy of insurance; and considers ways to enhance its use by vulnerable countries. The paper especially aims to inform policy decisions on disaster insurance. Through simulations of natural disasters and various insurance options, we find that sovereign decisions on optimal risk transfer involve balancing trade-offs between growth and debt, based on government risk preferences and country risk exposure. The choice of optimal insurance for smaller countries turns out to be more constrained by cost considerations due to their higher exposure, likely resulting in underinsurance; donor grants could help them achieve a more optimal protection. We also find that optimal insurance packages are those that are least costly relative to expected payouts (i.e. have the lowest insurance multiple), which are also the packages that insure less severe (more frequent) disasters

     

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  25. Federated States of Micronesia
    climate change policy assessment
    Published: 2019
    Publisher:  International Monetary Fund, Washington, D.C.

    This Climate Change Policy Assessment (CCPA) takes stock of the Federated States of Micronesia (FSM)'s climate response plans, from the perspective of their macroeconomic and fiscal implications. CCPA explores the possible impact of climate change... more

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    This Climate Change Policy Assessment (CCPA) takes stock of the Federated States of Micronesia (FSM)'s climate response plans, from the perspective of their macroeconomic and fiscal implications. CCPA explores the possible impact of climate change and natural disasters and the cost of FSM's planned response. It suggests macroeconomically relevant reforms that could strengthen the national strategy and identifies policy gaps and resource needs. FSM has made progress toward its Nationally Determined Contribution mitigation pledge by beginning to expand renewable power generation and improve its efficiency. The authorities plan to continue this and encourage the take-up of energy efficient building design and appliances. Accelerating adaptation investments is paramount, which requires addressing critical capacity constraints and increasing grant financing. It is recommended that FSM needs to increase its capacity to address natural disaster risks following the expiry of Compact-related assistance in 2023. It is advised to improve climate data collection and use, including on the costs of high and low intensity disasters and disaster response expenditure

     

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