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Foreign Aid, Public Savings Displacement, and Aid Dependency in Côte d’Ivoire: An Aid Disaggregation Approach

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  • B Ouattara

Abstract

This paper uses the fiscal response framework to investigate the extent to which different categories of foreign aid flows, namely project aid, programme aid, technical assistance and food aid, displace public savings and affect the recipient country's dependence on aid, using time series data for Cote d'Ivoire for the period 1975-99.The results indicate that, in general, project aid flows tend to reduce public savings and worsen Cote d'Ivoire's dependence on aid more than the other categories of aid flows. This finding therefore suggests that accounting for aid heterogeneity in aid studies as well as aid policies design and implementation could be crucial in improving aid effectiveness to achieve the Millennium Development Goals.
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  • B Ouattara, 2004. "Foreign Aid, Public Savings Displacement, and Aid Dependency in Côte d’Ivoire: An Aid Disaggregation Approach," Economics Discussion Paper Series 0406, Economics, The University of Manchester.
    • Handle: RePEc:man:sespap:0406
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    3. Muhammad Shahbaz & Faridul Islam & Muhammad Sabihuddin Butt, 2016. "Finance–Growth–Energy Nexus and the Role of Agriculture and Modern Sectors: Evidence from ARDL Bounds Test Approach to Cointegration in Pakistan," Global Business Review, International Management Institute, vol. 17(5), pages 1037-1059, October.
    4. Bazoumana Ouattara & Eric Strobl, 2008. "Aid, Policy and Growth: Does Aid Modality Matter?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(2), pages 347-365, July.
    5. Limodio, Nicola, 2011. "The impact of pro-vulnerable income transfers : Leisure, dependency and a distribution hypothesis," Policy Research Working Paper Series 5881, The World Bank.
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