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Foreign Aid and Revenue Response: Does the Composition of Aid Matter?

Open access
Pivovarsky, Alexander, Clements, Benedict J., Gupta, Sanjeev, Tiongson, Erwin, APivovarsky@imf.org, BClements@imf.org, SGupta@imf.org, ETiongson@imf.org·2003·IMF Working Papers

Abstract

This paper examines the revenue response to inflows of foreign aid in 107 countries during the period 1970–2000, In particular, it investigates whether the impact of aid on the revenue effort depends on the composition of aid (grants vis-à-vis loans). The results indicate that while concessional loans are associated with higher domestic revenue mobilization, the opposite is true of grants. On average, the dampening effect of grants on the revenue effort is modest. However, for those countries plagued by high levels of corruption, our results suggest that the decline in revenues completely offsets the increase in grants. The results are robust to various specifications.

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Metadata

Authors
Pivovarsky, A., Clements, B. J., Gupta, S., Tiongson, E., APivovarsky@imf.org, BClements@imf.org, SGupta@imf.org, & ETiongson@imf.org
Venue
IMF Working Papers
Published
2003
Volume
03
Issue
176
Pages
1
ISSN
1018-5941 (ISSN-L)
OpenAlex
W3122915810
Cited by
166
References
1
FWCI
30.06
Type
journal article
Language
en
Open access
bronze

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CoChat. (2026). Citation check: Foreign Aid and Revenue Response: Does the Composition of Aid Matter? https://app.cochat.ai/papers/10.5089/9781451858839.001
The paper
Pivovarsky, A., Clements, B. J., Gupta, S., Tiongson, E., APivovarsky@imf.org, BClements@imf.org, SGupta@imf.org, & ETiongson@imf.org. (2003). Foreign Aid and Revenue Response: Does the Composition of Aid Matter? IMF Working Papers. https://doi.org/10.5089/9781451858839.001

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