Fiscal inertia, donor credibility, and the monetary management of aid surges

• 成果类型: Article
• 署名作者: Buffie, Edward F.; O'Connell, Stephen A.; Adam, Christopher
• 署名单位: Indiana University System; Indiana University Bloomington; Swarthmore College; University of Oxford
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2009.09.006
• 发表日期: 2010
• 页码: 287-298
• 关键词: aid; credibility; Currency substitution; pooling; capital flows

摘要

Donors cannot pre-commit to support scaled-up public spending programs on a continuing basis, nor can governments credibly commit to curtail expenditure rapidly in the event that aid revenues contract. An aid boom may therefore be accompanied by a credibility problem. When this is the case, the absorb-and-spend strategy recommended by the IMF leads to capital flight, higher inflation, and large current account surpluses inclusive of aid. The right policy package combines a critical minimum degree of fiscal restraint with reverse sterilization. (C) 2009 Elsevier B.V. All rights reserved.