Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/126342
Authors: 
Marć, Łukasz
Year of Publication: 
2015
Series/Report no.: 
WIDER Working Paper 2015/010
Abstract: 
Aid is said to be fungible at the aggregate level if it raises government expenditures by less than the total amount. This happens when the recipient government decreases domestic revenue, decreases net borrowing, or when aid bypasses the budget. This study makes three contributions to both fungibility and fiscal response literature. First, fungibility at the aggregate level is re-examined on a bigger recent panel dataset, distinguishing between short- and longterm impact of aid. The results indicate that aid is partly fungible in the long run and highly fungible in the short run. Second, to account for aid bypassing the budget, technical cooperation is used as a proxy for off-budget aid. Off-budget aid is found to be non-fungible and on-budget aid is partly fungible. Third, fungibility of bilateral and multilateral aid is analysed: the results indicate lower fungibility of multilateral aid.
Subjects: 
foreign aid
fungibility
fiscal response
government expenditures
JEL: 
E62
F35
H50
O23
ISBN: 
978-92-9230-895-7
Document Type: 
Working Paper

Files in This Item:
File
Size
814.53 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.