The Macroeconomics of Scaling Up Aid: The Gleneagles Initiative for Benin

33 Pages Posted: 8 Jun 2009

See all articles by Issouf Samaké

Issouf Samaké

International Monetary Fund (IMF)

Joannes Mongardini

International Monetary Fund (IMF)

Date Written: May 2009

Abstract

This paper assesses the macroeconomic implications of scaling up aid for Benin in line with the Gleneagles commitment to double aid to poor countries over the next three years to reach $85 per capita by 2010 and keep it at that level thereafter. The analysis suggests that the additional aid inflows can be accommodated under Fund-supported programs without major disruptions to macroeconomic stability, provided the inflows are highly concessional and used effectively. There are, however, significant risks that the impact on growth and poverty reduction of the additional aid inflows could fall short of expectations, given Benin's limited absorptive and administrative capacity.

Keywords: Absorptive capacity, Aid flows, Benin, Concessional aid, Debt sustainability, Domestic investment, Financial assistance, Financial risk, Fiscal sustainability, Infrastructure, Millennium Development Goals

Suggested Citation

Samaké, Issouf and Mongardini, Joannes, The Macroeconomics of Scaling Up Aid: The Gleneagles Initiative for Benin (May 2009). IMF Working Papers, Vol. , pp. 1-32, 2009. Available at SSRN: https://ssrn.com/abstract=1415172

Issouf Samaké (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Joannes Mongardini

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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