The Spending and Absorption of Aid in PRGF Supported Programs

By Jan Kees Martijn, Markus Berndt, Abu Shonchoy, Paolo Dudine

October 1, 2008

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Jan Kees Martijn, Markus Berndt, Abu Shonchoy, and Paolo Dudine. The Spending and Absorption of Aid in PRGF Supported Programs, (USA: International Monetary Fund, 2008) accessed June 18, 2025

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 studies the spending and absorption of aid in PRGF-supported programs, verifies whether the use aid is programmed to be smoothed over time, and analyzes how considerations about macroeconomic stability influence the programmed use of aid. It finds that PRGF-supported programs allow countries to use most or almost all increases in aid within a few years. The paper finds some evidence that the programmed absorption of aid is higher in countries where reserve coverage is above a certain threshold, whereas programmed spending does not seem to depend on inflation. Finally, it shows that the presence of a PRGFsupported program does not constrain the actual spending and absorption of aid.

Subject: Balance of payments statistics, Current account deficits, Government debt management, Government finance statistics, Inflation

Keywords: Deficit net, Fiscal deficit, IMF program, Net of aid, Spending regression, WP

Publication Details

Pages:

44
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2008/237
Stock No:

WPIEA2008237
ISBN:

9781451870954
ISSN:

1018-5941

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