The Economics of Post Conflict Aid
November 1, 2002
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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.
Subject: Capital accumulation, Consumption, Development assistance, Foreign aid, Labor supply
Keywords: capital stock, WP
Pages:
36
Volume:
2002
DOI:
Issue:
198
Series:
Working Paper No. 2002/198
Stock No:
WPIEA1982002
ISBN:
9781451860078
ISSN:
1018-5941
