The Long-Run Macroeconomic Effects of Aid and Disaggregated Aid in Ethiopia

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  • Fiseha Haile Gebregziabher
This article investigates the long-run macroeconomic effects of aid and disaggregated aid flows in Ethiopia, currently the world's largest recipient of official development assistance, for the period 1960-2009. The results show that aid affects gross domestic product (GDP), investment and imports positively, whereas it is negatively associated with government consumption. Our results concerning the impacts of disaggregated aid stand in stark contrast to earlier work. Bilateral aid increases investment and GDP and is negatively associated with government consumption, whereas multilateral aid is only positively associated with imports. Grants contribute to GDP, investment and imports, whereas loans affect none of the variables. Finally, there is evidence to suggest that multilateral aid and loans have been disbursed in a procyclical fashion
Original languageEnglish
JournalJournal of International Development
Volume26
Issue number4
Pages (from-to)520-540
Number of pages21
ISSN1099-1328
DOIs
Publication statusPublished - 2014

ID: 51100313