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Aid, taxes, and government spending: A heterogeneous co-integrated panel analysis

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  • Abrams M.E. Tagem

Abstract

A substantial amount of aid to developing countries is given to the government, or goes through the budget, meaning it should have an impact on government fiscal behaviour (particularly on government spending). The few existing empirical studies on the effects of aid on government spending neglect variable time-series properties, cross-country (recipient) heterogeneity, and the potential for cross-country correlation.

Suggested Citation

  • Abrams M.E. Tagem, 2022. "Aid, taxes, and government spending: A heterogeneous co-integrated panel analysis," WIDER Working Paper Series wp-2022-107, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2022-107
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    References listed on IDEAS

    as
    1. Temple, Jonathan & Van de Sijpe, Nicolas, 2017. "Foreign aid and domestic absorption," Journal of International Economics, Elsevier, vol. 108(C), pages 431-443.
    2. Morrissey, Oliver, 2015. "Aid and Government Fiscal Behavior: Assessing Recent Evidence," World Development, Elsevier, vol. 69(C), pages 98-105.
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    5. Nicolas Van de Sijpe, 2013. "Is Foreign Aid Fungible? Evidence from the Education and Health Sectors," The World Bank Economic Review, World Bank, vol. 27(2), pages 320-356.
    6. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
    7. Giulia Mascagni & Emilija Timmis, 2017. "The Fiscal Effects of Aid in Ethiopia: Evidence from CVAR Applications," Journal of Development Studies, Taylor & Francis Journals, vol. 53(7), pages 1037-1056, July.
    8. ., 2014. "Phases of the development of economic thought in Islam," Chapters, in: History of Islamic Economic Thought, chapter 2, pages 7-19, Edward Elgar Publishing.
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    More about this item

    Keywords

    Aid; Cross-section dependence; Heterogeneity; Tax revenue; Foreign aid;
    All these keywords.

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