The Macroeconomics of Scaling Up Aid: The Gleneagles Initiative for Benin

Author/Editor: Mongardini, Joannes ; Samaké, Issouf
Publication Date: May 01, 2009
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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: This paper assesses the macroeconomic implications of scaling up aid for Benin in line with the Gleneagles commitment to double aid to poor countries over the next three years to reach $85 per capita by 2010 and keep it at that level thereafter. The analysis suggests that the additional aid inflows can be accommodated under Fund-supported programs without major disruptions to macroeconomic stability, provided the inflows are highly concessional and used effectively. There are, however, significant risks that the impact on growth and poverty reduction of the additional aid inflows could fall short of expectations, given Benin's limited absorptive and administrative capacity.
Series: Working Paper No. 09/115
Subject(s): Absorptive capacity | Aid flows | Benin | Concessional aid | Debt sustainability | Domestic investment | Financial assistance | Financial risk | Fiscal sustainability | Infrastructure | Millennium Development Goals

Author's Keyword(s): Benin | Scaling Up | Aid | Absorptive Capacity | Dutch Disease
Publication Date: May 01, 2009
Format: Paper
Stock No: WPIEA2009115 Pages: 32
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