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The Effect of Development Aid Unpredictability and Migrants' Remittances on Fiscal Consolidation in Developing Countries

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  • Sèna Kimm Gnangnon

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

Abstract

We use panel data on seventy-four developing countries for the period 1980-2007 to examine the effects of aid unpredictability and migrants' remittances on fiscal consolidation in these countries. Two definitions of fiscal adjustment are considered and a conditional logit model is used to perform the analysis. Evidence is shown that except for the case of low-income countries, remittances increase the likelihood of fiscal consolidation, be the latter gradual or rapid. Surprisingly, we observe that aid unpredictability, except in SSA countries where the effect is strongly positive and significant, does not affect the adoption of fiscal consolidation measures in all the groups considered.

Suggested Citation

  • Sèna Kimm Gnangnon, 2012. "The Effect of Development Aid Unpredictability and Migrants' Remittances on Fiscal Consolidation in Developing Countries," Working Papers halshs-00677108, HAL.
    • Handle: RePEc:hal:wpaper:halshs-00677108
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00677108
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    Cited by:

    1. Muhammad Zakaria & Wen Jun & Arooj Khan, 2023. "Effects Of Capital Inflows On Fiscal Balance In An Emerging Economy: Evidence From Pakistan," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 68(05), pages 1585-1598, September.
    2. Blanca Moreno-Dodson & Sanket Mohapatra & Dilip Ratha, 2012. "Migration, Taxation, and Inequality," World Bank Publications - Reports 10038, The World Bank Group.

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    Keywords

    Remittances; Aid Unpredictability; Fiscal consolidation;
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