The link between foreign aid and economic growth remains a controversial issue in the literature, and a large share of the disagreement could be explained by differences in the data employed. Using GDP data from three different versions of the Penn World Table and the World Development...

Given the significant inflows of foreign aid to sub-Saharan Africa (SSA) the possibility of Dutch Disease has been a concern. Most macroeconomic models predict that aid inflows, especially if large and/or unanticipated (shocks), will lead to an appreciation of the real exchange rate and...

Aid allocation studies typically find considerable heterogeneity in donors’ allocation patterns; be it for total Official Development Assistance (ODA) or sector-specific aid. This paper investigates the underlying factors influencing donors’ selection and actual allocation decisions for...

This paper makes two main contributions. First, we examine the long-run effect of foreign aid on domestic output for 59 developing countries using heterogeneous panel cointegration techniques to control for omitted variable and endogeneity bias to detect possible cross-country differences in the...

We develop a screening model to analyse the funding allocation criteria of institutional donors towards NGOs. The model shows that when donors care about efficiency, they screen NGOs and concentrate their funding on those that comply. Combining two waves, 2002 and 2008, of a unique survey data...

One of the most challenging problems in developing countries such as Ghana is exchange rate management, that is, 'getting the exchange rate right' especially in the context of exchange rate misalignment. The major research and policy question is what constitutes the equilibrium real exchange...

This paper provides analysis of the macroeconomic management implications of becoming an exporter of oil, taking the case of Ghana and applying to Uganda as a prospective exporter. The paper proceeds in two steps. First, we construct a Dynamic Stochastic General Equilibrium (DSGE) model of a...

We use Synthetic Control Methodology to estimate the output loss in Tunisia as a result of the "Arab spring". Our results suggest that each Tunisian citizen lost, on average, an estimated US$ 600 (5.5 percent of GDP), US$ 574 (5.1 percent of GDP) and US$ 735 (6.4 percent of GDP) in 2011, 2012...

In the study "Do elites benefit from democracy and foreign aid in developing countries" (Journal of Development Economics, 2009) Bjørnskov asks if political elites benefit from foreign aid relative to the rest of the population. He concludes that his results provide qualified support for the...

We propose a repeated moral hazard model with full commitment and limited punishment to study the problem of aid allocation in environments characterized by asymmetric information. The donor (principal) finances a three-period development program and the elite of the recipient country (agent),...