Aid Disaggregation and the Public Sector in Aid-Recipient Economies: Some Evidence from Cote D’Ivoire

Authors


  • The authors would like to thank Mark McGillivray for comments and Jean-Louis Grolleau at the OECD-DAC Office for helpful advice on the data front. They are also indebted to an anonymous referee for very constructive comments. George Mavrotas is also grateful to Finn Tarp, Erik Thorbecke as well as conference participants at the Nordic Conference in Development Economics in Copenhagen, June 2003, for useful comments and suggestions on an earlier draft. The usual disclaimer applies.

*Mavrotas: World Institute for Development Economics Research (WIDER), United Nations University, Katajanokanlaituri 6 B, 00160 Helsinki, Finland. Tel: (+358)-9-61599219; Fax: (+358)-9-61599333; E-mail: mavrotas@wider.unu.edu. Ouattara: University of Wales Swansea, James Callaghan Building, Singleton Park, Swansea SA2 8PP, UK.

Abstract

The present paper examines the impact of different aid types, namely project aid, program aid, technical assistance, and food aid on the fiscal sector of the aid-recipient economy by using time-series data for Côte d’Ivoire over the period 1975–99. Our empirical results show that when a single value (or aggregated) for aid is used, foreign aid is fully consumed in the case of Côte d’Ivoire. However, results obtained under the assumption of aid heterogeneity clearly suggest that the government responds differently according to the nature of the aid inflows. Our approach tries to illuminate the response of the aid-recipient government to different categories of foreign aid inflows and the empirical findings clearly demonstrate the importance of the aid disaggregation approach for delving deeper into aid effectiveness issues.

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