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Aid Volatility: An Empirical Assessment

Ales Bulir
International Monetary Fund (IMF)

A. Javier Hamann
International Monetary Fund (IMF) - Independent Evaluation Office

IMF Staff Papers, Vol. 50, No. 1, pp.64-89, 2003

Abstract:
This article examines empirical evidence on the volatility and uncertainty of aid flows and their main policy implications. Aid is found to be more volatile than fiscal revenues - particularly in highly aid-dependent countries - and shortfalls in aid and domestic revenue tend to coincide. The article also finds that uncertainty about aid disbursements is large and that the information content of commitments made by donors is either very small or statistically insignificant. Specific policies and broader international efforts to cope with these features of aid are briefly discussed.

Keywords: Aid, volatility, uncertainty, IMF programs, fiscal revenue

JEL Classifications: F35, O19

Accepted Paper Series

Date posted: January 17, 2006 ; Last revised: January 17, 2006

Suggested Citation

Bulir, Ales and Hamann, A. Javier, Aid Volatility: An Empirical Assessment. IMF Staff Papers, Vol. 50, No. 1, pp.64-89, 2003. Available at SSRN: http://ssrn.com/abstract=875633

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Contact Information

Ales Bulir (Contact Author) International Monetary Fund (IMF) ( email ) 700 19th Street NW Washington, DC 20431 United States
Alfonso Javier Hamann International Monetary Fund (IMF) - Independent Evaluation Office ( email ) 700 19th St. NW Washington, DC 20431 United States