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The Economics of Post Conflict Aid

Author/Editor: Demekas, Dimitri G. | McHugh, James | Kosma, Theodora
Authorized for Distribution: November 1, 2002
Electronic Access: Free Full Text (PDF file size is 980KB)
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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: Post conflict aid is different from conventional development aid and has different effects on the recipient economy. The paper builds a theoretical model tailored around the main stylized facts of post conflict aid and traces the impact of different kinds of post-conflict aid on capital accumulation, growth, welfare, and resource allocation. While both humanitarian and reconstruction aid are welfare-enhancing, humanitarian aid reduces long-run capital accumulation and growth. Reconstruction aid, on the other hand, may increase the long-run capital stock and, if carefully designed, avoid the pitfalls of the Dutch disease.
Series: Working Paper No. 02/198
Subject(s): Development assistance | Post-conflict emergency assistance
Author's keyword(s): Aid | reconstruction | humanitarian assistance | post conflict
    Published:   November 1, 2002        
    ISBN/ISSN:   1934-7073   Format:   Paper
    Stock No:   WPIEA1982002   Pages:   36
    Price:   US$15.00
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