## The Economics of Post Conflict Aid

_IMF Working Papers, November 1, 2002_

## Source details

**Canonical URL:** [The Economics of Post Conflict Aid](https://www.imf.org/en/publications/wp/issues/2016/12/30/the-economics-of-post-conflict-aid-16180)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/30/the-economics-of-post-conflict-aid-16180/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/30/the-economics-of-post-conflict-aid-16180/index.json)
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## Bibliographic details
- Authors: James McHugh, Theodora Kosma, Dimitri G Demekas
- Published: November 1, 2002
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451860078.001

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### Summary and Purpose
- 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 may increase the long-run capital stock and, if carefully designed, avoid the pitfalls of the Dutch disease.

### Key Findings
- Humanitarian aid:
  - Is welfare-enhancing in the short run.
  - Reduces long-run capital accumulation and growth.
- Reconstruction aid:
  - Is welfare-enhancing and can increase the long-run capital stock.
  - If carefully designed, can avoid the pitfalls of the Dutch disease.
- Theoretical approach:
  - A model is constructed around the main stylized facts of post conflict aid to analyze effects on capital accumulation, growth, welfare, and resource allocation.

### Subjects and Keywords
- Subject: Capital accumulation, Consumption, Development assistance, Foreign aid, Labor supply
- Keywords: capital stock, WP

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## Content in this bundle

- **The Economics of Post Conflict Aid - WP/02/198**
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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/the-economics-of-post-conflict-aid-16180_