{
  "title": "Foreign Aid and Revenue Response: Does the Composition of Aid Matter?",
  "publication": "IMF Working Papers, September 1, 2003",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/foreign-aid-and-revenue-response-does-the-composition-of-aid-matter-16823",
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  "summary": "This paper examines the revenue response to inflows of foreign aid in 107 countries during the period 1970–2000, In particular, it investigates whether the impact of aid on the revenue effort depends on the composition of aid (grants vis-à-vis loans).",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Study period: 1970–2000.\n- Sample: 107 countries.\n- Authors: Alexander Pivovarsky, Benedict J. Clements, Sanjeev Gupta, Erwin H Tiongson.\n- Publication: IMF Working Paper No. 2003/176."
    },
    {
      "heading": "Research question and approach",
      "content": "- Investigates whether the impact of foreign aid on the revenue effort depends on the composition of aid (grants vis-à-vis loans).\n- Focuses on the revenue response to inflows of foreign aid across the sample period and countries."
    },
    {
      "heading": "Key findings",
      "content": "- Concessional loans are associated with higher domestic revenue mobilization.\n- Grants are associated with lower domestic revenue mobilization (the opposite effect to concessional loans).\n- On average, the dampening effect of grants on the revenue effort is modest.\n- For countries plagued by high levels of corruption, the decline in revenues completely offsets the increase in grants.\n- Results are robust to various specifications."
    },
    {
      "heading": "Implications for policy and analysis",
      "content": "- The composition of aid (grants versus concessional loans) matters for domestic revenue mobilization strategies.\n- Anti-corruption efforts may be critical to ensuring that grants do not lead to net revenue declines in highly corrupt environments.\n- Policymakers and donors should consider the interaction between aid composition and governance when designing aid programs to avoid unintended negative effects on revenue effort.\n\nAuthors: Alexander Pivovarsky, Benedict J. Clements, Sanjeev Gupta, Erwin H Tiongson; September 1, 2003.\n\n---\n\n Content in this bundle\n\n- Foreign Aid and Revenue Response: Does the Composition of Aid Matter? - WP/03/176\n  - Foreign Aid and Revenue Response: Does the Composition of Aid Matter? - WP/03/176 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Foreign Aid and Revenue Response: Does the Composition of Aid Matter? - WP/03/176 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/foreign-aid-and-revenue-response-does-the-composition-of-aid-matter-16823"
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    "Authors: Alexander Pivovarsky, Benedict J. Clements, Sanjeev Gupta, Erwin H Tiongson",
    "Published: September 1, 2003",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451858839.001",
    "Study period: 1970–2000.",
    "Sample: 107 countries.",
    "Authors: Alexander Pivovarsky, Benedict J. Clements, Sanjeev Gupta, Erwin H Tiongson.",
    "Publication: IMF Working Paper No. 2003/176.",
    "Investigates whether the impact of foreign aid on the revenue effort depends on the composition of aid (grants vis-à-vis loans).",
    "Focuses on the revenue response to inflows of foreign aid across the sample period and countries.",
    "Concessional loans are associated with higher domestic revenue mobilization.",
    "Grants are associated with lower domestic revenue mobilization (the opposite effect to concessional loans).",
    "On average, the dampening effect of grants on the revenue effort is modest.",
    "For countries plagued by high levels of corruption, the decline in revenues completely offsets the increase in grants.",
    "Results are robust to various specifications.",
    "The composition of aid (grants versus concessional loans) matters for domestic revenue mobilization strategies.",
    "Anti-corruption efforts may be critical to ensuring that grants do not lead to net revenue declines in highly corrupt environments.",
    "Policymakers and donors should consider the interaction between aid composition and governance when designing aid programs to avoid unintended negative effects on revenue effort.",
    "**Foreign Aid and Revenue Response: Does the Composition of Aid Matter? - WP/03/176**"
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