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Aid Volatility, Policy and Development

Hudson, J. and Mosley, P. (2007) Aid Volatility, Policy and Development. Working Paper. Department of Economics, University of Sheffield ISSN 1749-8368


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We build on Bulir and Hamann's analysis of aid volatility (2003, 2005), showing that the conclusions reached depend on the dataset used. Their argument that the poorest countries have the highest volatility appears not to be correct. The impact of volatility on growth is negative overall, but differs between positive and negative volatility. The mix between `responsive´ components of aid, e.g. programme aid, and `proactive´ components, e.g. technical assistance, is important. Finally, we conclude that measures which increase trust between donor and recipient, and reductions in the degree of donor `oligopoly´, reduce aid volatility without obviously reducing its effectiveness.

Item Type: Monograph (Working Paper)
Copyright, Publisher and Additional Information: The Sheffield Economics Research Paper (SERP) series offers a forum for the research output of the academic staff and research students of the Department of Economics, University of Sheffield. Papers are reviewed for quality and presentation by a departmental editor. However, the contents and opinions expressed remain the responsibility of the authors. All papers may be downloaded free on the understanding that the contents are preliminary and therefore permission from the author(s) should be sought before they are referenced.
Keywords: aid volatility, disasters, trust, upside and downside volatility
Institution: The University of Sheffield
Academic Units: The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) > Sheffield Economics Research Papers Series
Depositing User: Repository Officer
Date Deposited: 21 Oct 2009 16:12
Last Modified: 12 Jun 2014 11:58
Published Version: http://www.shef.ac.uk/economics/research/serps/yea...
Status: Published
Publisher: Department of Economics, University of Sheffield
Identification Number: Sheffield Economic Research Paper Series 2007015
URI: http://eprints.whiterose.ac.uk/id/eprint/9972

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