The macroeconomics of scaling up aid

By Andrew Berg

Subjects: Fallstudier, Finanspolitik, Case studies, Economic assistance, Capacite? d'absorption (Economie politique), Penningpolitik, Etudes de Cas, Politica de gastos de gobierno, Politique gouvernementale, Economic development, Cas, Études de, Asistencia economica, Wirtschaftshilfe, Dépenses publiques, Government spending policy, Capacité d'absorption (Économie politique), Aide à l'étranger, Utvecklingsbistånd, Nationalräkenskaper, Capacidad absorbente (Economia), Depenses publiques, Modèles économétriques, Absorptive capacity (Economics), Entwicklungshilfe, Nationalbudget, Aide économique, Aide economique, Estudio de casos, Öffentliche Investition, Africa, economic conditions, Aide au développement

Description: This study analyzes key issues associated with large increases in aid, including absorptive capacity, Dutch disease, and inflation. The authors develop a framework that emphasizes the different roles of monetary and fiscal policy and apply it to the recent experience of five countries: Ethiopia, Ghana, Mozambique, Tanzania, and Uganda. These countries have often found it difficult to coordinate monetary and fiscal policy in the face of conflicting objectives, notably to spend the aid money on domestic goods and to avoid excessive exchange rate appreciation.