We examine the cyclical properties of development aid using bilateral data for 22 donors and over 100 recipients during 1970?2005. We find that bilateral aid flows are on average procyclical with respect to business cycles in donor and recipient countries. However, they become countercyclical...

We analyze the growth impact of official development assistance to developing countries. Our approach is different from that of previous studies in two major ways. First, we disentangle the effects of two kinds of aid: developmental and non-developmental. Second, our specifications allow for the...

With official development assistance (ODA) set to rise as countries strive to meet the Millennium Development Goals (MDGs), aid effectiveness remains an important area of development policy. An increasing number of studies support the notion that ODA can contribute to growth in a nonlinear...

The volume of foreign aid has increased during the last four decades, albeit with interruptions in certain years. Over time, the major recipients have changed: while the share of aid to Asia has diminished since the 1980s, that destined for sub-Saharan Africa has grown. There is some evidence...

This paper assesses the effectiveness of foreign aid in reducing poverty through its impact on human development indicators. We use a dataset of both bilateral aid and NGO aid flows. Our results show that NGO aid reduces infant mortality and does so more effectively than official bilateral aid....

Substantially scaling up of aid flows will require development partners to address many issues, including the impact of higher aid flows on: the competitiveness of aid recipients; the management of fiscal and monetary policy; the delivery of public services; behavioral incentives; and the rate...

Aid has been for decades an important source of financing for developing countries, but more recently remittance flows have increased rapidly and are beginning to dwarf aid flows. This paper investigates how remittances affect aid flows, and how this relationship varies depending on the channel...

The positive impact of foreign aid is limited by the erratic behavior of aid flows. The introduction in 1999 of various initiatives anchored in Poverty Reduction Strategy Papers (PRSPs) which were aimed at strengthening coordination among donors, improving the design of financial support...

This paper discusses key findings of the Sixth Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility (PRGF) for Tanzania. Economic growth, inflation, and the external position have evolved in a manner consistent with program objectives, and the program has...

Togo has made significant progress in advancing economic and political reforms under the Staff-Monitored Program (SMP). Important fiscal governance reforms have boosted tax revenues and helped expenditure control. The I-PRSP is designed to preserve macroeconomic stability while reviving economic...