The Political Economy of Aid: Foreign Aid Effectiveness, Theories, Methods and the Challenges that Lie Ahead / Marco Zupi -- Public Procurement, Investment and Aid Effectiveness / Oliver Morrissey -- Procurement and Aid Effectiveness : the Journey so far / Annamaria La Chimia and Peter Trepte --...

This paper assesses the optimal setting of fiscal spending and foreign exchange rate intervention policies in response to volatile foreign aid, in a small open economy model that incorporates typical features of low-income countries. Within a class of policy rules, it jointly considers the...

Public spending often increases at the end of fiscal years. This is undesirable because late spending tends to be inefficient. The causes for these spending spikes are however poorly understood. This paper offers a novel identification strategy that relies on the historic variation in countries'...

External revenue in the form of foreign aid constitutes an important component of the government's budget constraint in many developing countries. We derive optimal public spending — and the resulting optimal deficit and debt — in an optimal control framework when the government seeks to...

The most recent literature on aid effectiveness finds a positive effect of aid on growth. To the extent that aid goes through the budget, this either reflects an aid-financed increase in government expenditures (quantity effect) or an improvement in the use of government resources as a result of...