An important feature of aid to developing countries is that it is given to the government. As a result, aid should be expected to affect fiscal behaviour. Traditional approaches to modelling fiscal effects are beset by theoretical and empirical problems. This paper applies techniques developed...

Aid has been the principal source of development finance for the majority of developing countries over the past few decades. This has spawned a large literature on the effectiveness of aid, which remains essentially inconclusive. The empirical literature has tended to evaluate the impact of aid...

Theoretical predictions and empirical evidence on the impact of foreign aid and fiscal policy on growth are mixed. This paper examines the effect of fiscal variables (government expenditure and revenue) and aid on growth using annual time series data for Kenya over the period 1964 - 2002....

It is clear from the implications of growth theory that the impact of aid depends on how it affects savings, investment and government behaviour. In respect of low-income countries, which are the principal aid recipients and the economies for which the issue of the impact of aid on growth is...

This paper looks at interactions between foreign development aid, economic reform and public sector fiscal behaviour. It proposes a model of the public sector fiscal response to aid inflows, which allows for changes in structural relationships due to an exogenously imposed program of economic...