Publications

Type of Publication: Discussion contributions

Aid, Spending Strategies and Productivity Effects - A Multi-Sectoral CGE-Analysis for Zambia

Author(s):
Clausen, V.; Schürenberg-Frosch, H.
Publisher:
Ruhr Economic Papers
Number of Report or Contribution:
127
Location(s):
Essen
Publication Date:
2009
ISBN:
978-3-86788-142-5
ISSN:
1864-4872
Language:
english
Keywords:
Foreign aid, applied general equilibrium, Zambia, Dutch Disease, productivity
Citation:
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Abstract

Numerous econometric studies fail to detect a signicant and robust relationship
between international aid and economic growth in the recipient countries.
Dutch Disease effects might be responsible for this result.This paper examines
the relation between aid and its effectiveness in a multi-sector multihousehold
Computable General Equilibrium (CGE)-framework. Given that
international transfers to African countries increasingly take the form of general
financial support to the government, different spending strategies and
their macroeconomic, sectoral and distributional effects are evaluated in a
two-stage simulation making a distinction between immediate direct effects
and possible long-run effects from increased productivity. While the model
simulates the effects of additional aid in Zambia it can be used as a blueprint
for other African countries.