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Aid Volatility and Donor–Recipient Characteristics in ‘Difficult Partnership Countries’
Author(s) -
FIELDING DAVID,
MAVROTAS GEORGE
Publication year - 2008
Publication title -
economica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.532
H-Index - 65
eISSN - 1468-0335
pISSN - 0013-0427
DOI - 10.1111/j.1468-0335.2007.00621.x
Subject(s) - volatility (finance) , general partnership , limiting , economics , aid effectiveness , monetary economics , business , developing country , econometrics , finance , economic growth , mechanical engineering , engineering
One factor limiting aid effectiveness is its volatility. We examine aid volatility in 66 countries over 1975–2004, paying particular attention to the characteristics of ‘difficult partnership countries’ and making a distinction between sector aid and total aid. We explore whether weak recipient institutions and policies are associated with greater volatility, allowing for differences in donor characteristics. Institutional quality and macroeconomic stability affect the stability of all kinds of aid, as does reliance on a small number of donors. However, the relative importance of these effects varies across different aid types.