Financing Uganda'S Poverty Reduction Strategy: Is Aid Causing More Pain Than Gain?

Author/Editor:

Mwanza Nkusu

Publication Date:

September 1, 2004

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Uganda's market-friendly development strategy and poverty reduction agenda have attracted large financial inflows, including aid. During 2000-02, concerns about a possible aid-induced Dutch disease were heightened by widening macroeconomic imbalances and an upward trend in the real effective exchange rate (REER). This paper shows that the REER remained broadly stable during a 10-year period and nontraditional exports increased remarkably, contrary to the predictions of the Dutch disease model. Also, economic growth was strong. This good performance is attributed to sound macroeconomic policies and important structural reforms, which have allowed an increased use of available production factors.

Series:

Working Paper No. 2004/170

Subject:

English

Publication Date:

September 1, 2004

ISBN/ISSN:

9781451858457/1018-5941

Stock No:

WPIEA1702004

Pages:

30

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