Foreign Aid and Consumption Smoothing: Evidence From Global Food Aid
IMF Working Papers, February 1, 2003
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- Foreign Aid and Consumption Smoothing: Evidence From Global Food Aid
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Bibliographic details
- Authors: Erwin H Tiongson, Benedict J. Clements, Sanjeev Gupta
- Published: February 1, 2003
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451845990.001
Summary
- Global food aid is considered a critical consumption smoothing mechanism in many countries, but its record of stabilizing consumption has been mixed.
- This paper examines the cyclical properties of food aid with respect to food availability in recipient countries, with a view to assessing its impact on consumption in some 150 developing countries and transition economies, covering 1970 to 2000.
- The results are robust to various specifications and filtering techniques and have important implications for macroeconomic and fiscal management.
Key findings
- Global food aid has been allocated to countries most in need.
- Food aid has been countercyclical within countries with the greatest need.
- For most countries, food aid is not countercyclical.
- The amount of food aid provided is insufficient to mitigate contemporaneous shortfalls in consumption.
Data, scope, and methodology (as stated)
- Coverage: some 150 developing countries and transition economies.
- Time period: covering 1970 to 2000.
- Robustness: results hold across various specifications and filtering techniques.
Policy implications and considerations
- The observed insufficiency of food aid to mitigate contemporaneous consumption shortfalls suggests limits to food aid’s effectiveness as a consumption smoothing instrument.
- Findings have important implications for macroeconomic and fiscal management in recipient countries, particularly where food aid is not reliably countercyclical.
Content in this bundle
- Foreign Aid and Consumption Smoothing: Evidence from Global Food Aid - WP/03/40