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Structural economic vulnerability, openness and bilateral development aid flows

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  • Gnangnon, Sèna Kimm

Abstract

This study investigates the relationship between countries’ structural economic vulnerability (EVI) and the bilateral aid received from donors, including in the context of higher degree of trade openness and/or financial openness. The empirical analysis suggests that donors’ bilateral aid supply to Least developed countries (LDCs) increases when the latter experience higher EVI. A rise in EVI in non-Least developed countries (non-LDCs) does not lead to higher donors’ aid supply. Furthermore, the analysis indicates that the impact of EVI on bilateral aid inflows could be dependent upon the degree of trade openness or financial openness but not on both together.

Suggested Citation

  • Gnangnon, Sèna Kimm, 2017. "Structural economic vulnerability, openness and bilateral development aid flows," Economic Analysis and Policy, Elsevier, vol. 53(C), pages 77-95.
    • Handle: RePEc:eee:ecanpo:v:53:y:2017:i:c:p:77-95
    DOI: 10.1016/j.eap.2016.12.001
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    More about this item

    Keywords

    Structural economic vulnerability; Bilateral aid flows; Trade openness; International financial integration;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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