@techreport{Clarke2007allocation,
abstract = {Aid is an important resource for developing countries. Many small island states  (including those in the Pacific) are highly reliant on aid to supplement meagre  government resources and other foreign capital inflows. This paper investigates the  conditional volatility of aid (for bilateral aid disaggregated into sector aid and  programme aid, and multilateral aid) to small island states using an econometric  framework. In addition, year-on-year changes in aid allocation are also considered for  both changes in aid allocations from major donors to the Pacific as well as for changes  in aid receipts in 16 Pacific island countries. The entire sample of countries under  consideration includes 44 aid-receiving (small island) states from the regions of Asia-Pacific, Africa and the Americas over the period 1973 to 2004. This paper finds  that past aid flows are correlated with present aid flows and that volatility on both sector  and programme aid in the Americas and Asia-Pacific region are characterized by a  higher degree of volatility than in the African region. An important result of the analysis  is that shocks to bilateral aid result in the persistence of volatility for a number of years  before stabilizing. This evidence of persistence in volatility, whereby the past levels of  volatility influence the degree of volatility that can be expected in the future, implies a  certain degree of predictability in the conditional volatility of bilateral aid. The paper  also finds that on average multilateral aid is not only considerably more volatile than the  bilateral aid, but it is also more unpredictable.},
address = {Helsinki},
author = {Matthew Clarke and Tim Fry and Sandra Mihajilo},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
isbn = {9291909572=978-92-9190-957-5},
keywords = {F35; 330; aid volatility; small island states; Entwicklungshilfekonditionen; Insel; Kleines-Land-Modell; Pazifischer Raum},
language = {eng},
number = {2007/18},
publisher = {UNU-WIDER},
title = {Aid allocation volatility to small island states},
type = {Research Paper, UNU-WIDER, United Nations University (UNU)},
url = {http://hdl.handle.net/10419/63544},
year = {2007}
}
