Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93688
Authors: 
Bwire, Thomas
Morrissey, Oliver
Lloyd, Tim
Year of Publication: 
2013
Series/Report no.: 
WIDER Working Paper 2013/101
Abstract: 
A dynamic relationship between foreign aid and domestic fiscal variables in Uganda is analysed using a cointegrated vector autoregressive model over the period 1972-2008. Results show that aid is a significant element of long-run fiscal equilibrium, is associated with increased tax effort and public spending, and reduced domestic borrowing. Shocks to tax revenue are the pulling forces, while those to domestic borrowing, government spending and aid are the pushing forces of the system. In terms of policy, it is crucial for donors to increase the reliability and predictability of aid, coordinate aid delivery systems and also make aid more transparent.
Subjects: 
domestic fiscal variables
aid
economic instability
ESAP
CVAR
common trends
Uganda
JEL: 
C32
F35
O23
O55
Document Type: 
Working Paper

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