Foreign aid and economic growth: The role of flexible labor supply

• 成果类型: Article
• 署名作者: Chatterjee, Santanu; Turnovsky, Stephen J.
• 署名单位: University System of Georgia; University of Georgia; University of Washington; University of Washington Seattle
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2006.03.001
• 发表日期: 2007
• 页码: 507-533
• 关键词: foreign aid; international transfers; endogenous labor; Economic growth; public investment

摘要

This paper examines the link between foreign aid, economic growth, and welfare in a small open economy. External transfers impinge on the recipient's macroeconomic performance by affecting resource allocation decisions and relative prices. The endogeneity of the labor-leisure choice plays a crucial role in the propagation of foreign aid shocks. The efficacy of foreign aid also depends on externalities associated with the public good that it helps finance. The impact of tied and untied aid on the recipient government's intertemporal fiscal balance is examined. Finally, the transitional adjustment to a foreign aid shock is shown to be sensitive to the elasticity of substitution in production and the relative importance of the labor-leisure choice in utility. (C) 2006 Elsevier B.V. All rights reserved.