The Macroeconomics of Managing Increased Aid Inflows - Experiences of Low-Income Countries and Policy Implications
Policy Papers, August 8, 2005
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Bibliographic details
- Published: August 8, 2005
- Series: Policy Papers
Summary
- Investigates the macroeconomic challenges for low-income countries created by a surge in aid inflows.
- Develops an analytical framework for examining possible policy responses to increased aid.
- Applies this framework to the experience of five relatively well-governed countries that experienced a recent surge in aid inflows: Ethiopia, Ghana, Mozambique, Tanzania, and Uganda.
- Notes that each country’s policies were supported by a PRGF arrangement during most of the period under review.
Analytical framework and country applications
- Analytical framework: Examines policy responses to increased aid inflows (framework details described in the publication).
- Country case studies:
- Ethiopia
- Ghana
- Mozambique
- Tanzania
- Uganda
- Institutional context: Each country’s policies were supported by a PRGF arrangement during most of the period under review.
Key themes and implications
- Macroeconomic challenges from aid surges:
- Managing fiscal policy and public expenditure scaling.
- Addressing potential pressures on exchange rates and external balances.
- Ensuring absorption capacity and public sector governance in the face of increased resources.
- Policy response considerations:
- Use of analytical framework to evaluate fiscal, monetary, and exchange-rate policy options when aid inflows increase.
- Importance of country-specific assessments given differing institutions and governance.
- Relevance:
- Focused on experiences of relatively well-governed low-income countries that received substantial aid surges.
Publication details and access
- Publication date: August 8, 2005
- Format: Web landing page (PDF available for download from the publication page)
- Subjects: Development assistance; Low Income Developing Countries; Poverty Reduction and Growth Facility
The Macroeconomics of Managing Increased Aid Inflows - Experiences of Low-Income Countries and Policy Implications, August 8, 2005