Post-Conflict Aid, Real Exchange Rate Adjustment, and Catch-up Growth
Post-conflict countries receive substantial aid flows after the start of peace. While post-conflict countries' capacity to absorb aid (that is, the quality of their policies and institutions) is built up only gradually after the onset of peace...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2007/04/7524376/post-conflict-aid-real-exchange-rate-adjustment-catch-up-growth http://hdl.handle.net/10986/7035 |
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okr-10986-70352021-04-23T14:02:33Z Post-Conflict Aid, Real Exchange Rate Adjustment, and Catch-up Growth Elbadawi, Ibrahim A. Kaltani, Linda Schmidt-Hebbel, Klaus AGGREGATE OUTPUT AID FINANCING AID FLOWS BENCHMARK BUDGET CONSTRAINTS CAPITAL FLOWS CAPITAL INFLOWS CENTRAL BANK CIVIL PEACE CIVIL WAR CIVIL WARS COEFFICIENT ESTIMATE COMPARATIVE ADVANTAGE COMPETITIVENESS CONDITIONALITY CONFLICT COUNTRY CONFLICTS CRIME CRISES CURRENCY ASSETS DATA AVAILABILITY DEBT DEVELOPING COUNTRIES DEVELOPMENT AID DEVELOPMENT ASSISTANCE DEVELOPMENT GOALS DEVELOPMENT PROCESS DEVELOPMENT STRATEGIES DIMINISHING RETURNS DISEQUILIBRIUM DONOR CONDITIONALITY ECONOMIC ACTIVITIES ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC REFORMS ECONOMIC RESEARCH ELASTICITY EMPIRICAL EVIDENCE EMPIRICAL GROWTH LITERATURE EMPIRICAL GROWTH MODEL EMPIRICAL LITERATURE EMPIRICAL MODEL ESTIMATED ELASTICITY ESTIMATION RESULTS ESTIMATION TECHNIQUES EXCHANGE RATE MISALIGNMENT EXCOMBATANTS EXPLOITATION EXPORT DIVERSIFICATION EXPORT GROWTH EXPORTS EXTERNALITIES FINANCIAL DEVELOPMENT FOREIGN AID FOREIGN EXCHANGE GDP GROWTH DETERMINANTS GROWTH EFFECT GROWTH IMPACT GROWTH MODEL GROWTH PROSPECTS GROWTH SPECIFICATION HIGH RISK HUMANITARIAN AID IMPORTS INCOME PER CAPITA INCREASE GROWTH INDIVIDUAL COUNTRIES INFLATION INFRASTRUCTURE INVESTMENT INTERNATIONAL DEVELOPMENT JOB OPPORTUNITIES LABOR MARKET LONG RUN LONG-RUN GROWTH MACROECONOMIC MANAGEMENT MACROECONOMIC OUTCOMES MACROECONOMICS MILLION PEOPLE NATURAL RESOURCES NON-TRADITIONAL EXPORTS 0 HYPOTHESIS OPEN ECONOMY OVERVALUATION PANEL REGRESSIONS PEACE PERIOD PEACE PROCESS POLICY IMPLICATIONS POLICY ISSUES POLICY RESEARCH POST-CONFLICT POST-CONFLICT COUNTRIES POST-CONFLICT COUNTRY POST-CONFLICT ECONOMIES POST-CONFLICT ECONOMY POST-CONFLICT EXPERIENCE POST-CONFLICT GOVERNMENTS POST-CONFLICT PEACE POST-CONFLICT PERIOD POVERTY REDUCTION PRIORITIES PRO-POOR REAL EXCHANGE RATE RECONSTRUCTION RESOURCE ALLOCATION SIGNIFICANT CORRELATION SIGNIFICANT EFFECT SOCIAL SPENDING STANDARD GROWTH DETERMINANTS SUSTAINABILITY TRADE DEFICIT TRADE OPENNESS TRADE REGIME TRADED SECTOR UNDERVALUATION UNDERVALUED EXCHANGE RATE UNEMPLOYMENT UNEMPLOYMENT RATE WAGES Post-conflict countries receive substantial aid flows after the start of peace. While post-conflict countries' capacity to absorb aid (that is, the quality of their policies and institutions) is built up only gradually after the onset of peace, the evidence suggests that aid tends to peak immediately after peace is attained and decline thereafter. Aid composition broadly reflects post-conflict priorities, with large parts of aid financing social expenditure and infrastructure investment. Aid has significant short-term effects on the real exchange rate (RER), as inferred from the behavior of RER in the world. While moderate RER overvaluation is observed in post-conflicts, it cannot be traced down to the aid flows. The empirical evidence on world growth reveals new findings about the pattern of catch-up growth during post-conflicts and the role of key growth determinants on post-conflict growth. Aid is an important determinant of growth, both generally and more strongly during post-conflict periods. Because RER misalignment reduces growth, RER overvaluation during post-conflicts reduces catch-up growth. Aid and RER overvaluation combined also lower growth. But the negative growth effect of RER overvaluation declines with financial development. 2012-06-04T19:17:04Z 2012-06-04T19:17:04Z 2007-04 http://documents.worldbank.org/curated/en/2007/04/7524376/post-conflict-aid-real-exchange-rate-adjustment-catch-up-growth http://hdl.handle.net/10986/7035 English Policy Research Working Paper; No. 4187 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
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English |
| topic |
AGGREGATE OUTPUT AID FINANCING AID FLOWS BENCHMARK BUDGET CONSTRAINTS CAPITAL FLOWS CAPITAL INFLOWS CENTRAL BANK CIVIL PEACE CIVIL WAR CIVIL WARS COEFFICIENT ESTIMATE COMPARATIVE ADVANTAGE COMPETITIVENESS CONDITIONALITY CONFLICT COUNTRY CONFLICTS CRIME CRISES CURRENCY ASSETS DATA AVAILABILITY DEBT DEVELOPING COUNTRIES DEVELOPMENT AID DEVELOPMENT ASSISTANCE DEVELOPMENT GOALS DEVELOPMENT PROCESS DEVELOPMENT STRATEGIES DIMINISHING RETURNS DISEQUILIBRIUM DONOR CONDITIONALITY ECONOMIC ACTIVITIES ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC REFORMS ECONOMIC RESEARCH ELASTICITY EMPIRICAL EVIDENCE EMPIRICAL GROWTH LITERATURE EMPIRICAL GROWTH MODEL EMPIRICAL LITERATURE EMPIRICAL MODEL ESTIMATED ELASTICITY ESTIMATION RESULTS ESTIMATION TECHNIQUES EXCHANGE RATE MISALIGNMENT EXCOMBATANTS EXPLOITATION EXPORT DIVERSIFICATION EXPORT GROWTH EXPORTS EXTERNALITIES FINANCIAL DEVELOPMENT FOREIGN AID FOREIGN EXCHANGE GDP GROWTH DETERMINANTS GROWTH EFFECT GROWTH IMPACT GROWTH MODEL GROWTH PROSPECTS GROWTH SPECIFICATION HIGH RISK HUMANITARIAN AID IMPORTS INCOME PER CAPITA INCREASE GROWTH INDIVIDUAL COUNTRIES INFLATION INFRASTRUCTURE INVESTMENT INTERNATIONAL DEVELOPMENT JOB OPPORTUNITIES LABOR MARKET LONG RUN LONG-RUN GROWTH MACROECONOMIC MANAGEMENT MACROECONOMIC OUTCOMES MACROECONOMICS MILLION PEOPLE NATURAL RESOURCES NON-TRADITIONAL EXPORTS 0 HYPOTHESIS OPEN ECONOMY OVERVALUATION PANEL REGRESSIONS PEACE PERIOD PEACE PROCESS POLICY IMPLICATIONS POLICY ISSUES POLICY RESEARCH POST-CONFLICT POST-CONFLICT COUNTRIES POST-CONFLICT COUNTRY POST-CONFLICT ECONOMIES POST-CONFLICT ECONOMY POST-CONFLICT EXPERIENCE POST-CONFLICT GOVERNMENTS POST-CONFLICT PEACE POST-CONFLICT PERIOD POVERTY REDUCTION PRIORITIES PRO-POOR REAL EXCHANGE RATE RECONSTRUCTION RESOURCE ALLOCATION SIGNIFICANT CORRELATION SIGNIFICANT EFFECT SOCIAL SPENDING STANDARD GROWTH DETERMINANTS SUSTAINABILITY TRADE DEFICIT TRADE OPENNESS TRADE REGIME TRADED SECTOR UNDERVALUATION UNDERVALUED EXCHANGE RATE UNEMPLOYMENT UNEMPLOYMENT RATE WAGES |
| spellingShingle |
AGGREGATE OUTPUT AID FINANCING AID FLOWS BENCHMARK BUDGET CONSTRAINTS CAPITAL FLOWS CAPITAL INFLOWS CENTRAL BANK CIVIL PEACE CIVIL WAR CIVIL WARS COEFFICIENT ESTIMATE COMPARATIVE ADVANTAGE COMPETITIVENESS CONDITIONALITY CONFLICT COUNTRY CONFLICTS CRIME CRISES CURRENCY ASSETS DATA AVAILABILITY DEBT DEVELOPING COUNTRIES DEVELOPMENT AID DEVELOPMENT ASSISTANCE DEVELOPMENT GOALS DEVELOPMENT PROCESS DEVELOPMENT STRATEGIES DIMINISHING RETURNS DISEQUILIBRIUM DONOR CONDITIONALITY ECONOMIC ACTIVITIES ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC REFORMS ECONOMIC RESEARCH ELASTICITY EMPIRICAL EVIDENCE EMPIRICAL GROWTH LITERATURE EMPIRICAL GROWTH MODEL EMPIRICAL LITERATURE EMPIRICAL MODEL ESTIMATED ELASTICITY ESTIMATION RESULTS ESTIMATION TECHNIQUES EXCHANGE RATE MISALIGNMENT EXCOMBATANTS EXPLOITATION EXPORT DIVERSIFICATION EXPORT GROWTH EXPORTS EXTERNALITIES FINANCIAL DEVELOPMENT FOREIGN AID FOREIGN EXCHANGE GDP GROWTH DETERMINANTS GROWTH EFFECT GROWTH IMPACT GROWTH MODEL GROWTH PROSPECTS GROWTH SPECIFICATION HIGH RISK HUMANITARIAN AID IMPORTS INCOME PER CAPITA INCREASE GROWTH INDIVIDUAL COUNTRIES INFLATION INFRASTRUCTURE INVESTMENT INTERNATIONAL DEVELOPMENT JOB OPPORTUNITIES LABOR MARKET LONG RUN LONG-RUN GROWTH MACROECONOMIC MANAGEMENT MACROECONOMIC OUTCOMES MACROECONOMICS MILLION PEOPLE NATURAL RESOURCES NON-TRADITIONAL EXPORTS 0 HYPOTHESIS OPEN ECONOMY OVERVALUATION PANEL REGRESSIONS PEACE PERIOD PEACE PROCESS POLICY IMPLICATIONS POLICY ISSUES POLICY RESEARCH POST-CONFLICT POST-CONFLICT COUNTRIES POST-CONFLICT COUNTRY POST-CONFLICT ECONOMIES POST-CONFLICT ECONOMY POST-CONFLICT EXPERIENCE POST-CONFLICT GOVERNMENTS POST-CONFLICT PEACE POST-CONFLICT PERIOD POVERTY REDUCTION PRIORITIES PRO-POOR REAL EXCHANGE RATE RECONSTRUCTION RESOURCE ALLOCATION SIGNIFICANT CORRELATION SIGNIFICANT EFFECT SOCIAL SPENDING STANDARD GROWTH DETERMINANTS SUSTAINABILITY TRADE DEFICIT TRADE OPENNESS TRADE REGIME TRADED SECTOR UNDERVALUATION UNDERVALUED EXCHANGE RATE UNEMPLOYMENT UNEMPLOYMENT RATE WAGES Elbadawi, Ibrahim A. Kaltani, Linda Schmidt-Hebbel, Klaus Post-Conflict Aid, Real Exchange Rate Adjustment, and Catch-up Growth |
| relation |
Policy Research Working Paper; No. 4187 |
| description |
Post-conflict countries receive
substantial aid flows after the start of peace. While
post-conflict countries' capacity to absorb aid (that
is, the quality of their policies and institutions) is built
up only gradually after the onset of peace, the evidence
suggests that aid tends to peak immediately after peace is
attained and decline thereafter. Aid composition broadly
reflects post-conflict priorities, with large parts of aid
financing social expenditure and infrastructure investment.
Aid has significant short-term effects on the real exchange
rate (RER), as inferred from the behavior of RER in the
world. While moderate RER overvaluation is observed in
post-conflicts, it cannot be traced down to the aid flows.
The empirical evidence on world growth reveals new findings
about the pattern of catch-up growth during post-conflicts
and the role of key growth determinants on post-conflict
growth. Aid is an important determinant of growth, both
generally and more strongly during post-conflict periods.
Because RER misalignment reduces growth, RER overvaluation
during post-conflicts reduces catch-up growth. Aid and RER
overvaluation combined also lower growth. But the negative
growth effect of RER overvaluation declines with financial development. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Elbadawi, Ibrahim A. Kaltani, Linda Schmidt-Hebbel, Klaus |
| author_facet |
Elbadawi, Ibrahim A. Kaltani, Linda Schmidt-Hebbel, Klaus |
| author_sort |
Elbadawi, Ibrahim A. |
| title |
Post-Conflict Aid, Real Exchange Rate Adjustment, and Catch-up Growth |
| title_short |
Post-Conflict Aid, Real Exchange Rate Adjustment, and Catch-up Growth |
| title_full |
Post-Conflict Aid, Real Exchange Rate Adjustment, and Catch-up Growth |
| title_fullStr |
Post-Conflict Aid, Real Exchange Rate Adjustment, and Catch-up Growth |
| title_full_unstemmed |
Post-Conflict Aid, Real Exchange Rate Adjustment, and Catch-up Growth |
| title_sort |
post-conflict aid, real exchange rate adjustment, and catch-up growth |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2007/04/7524376/post-conflict-aid-real-exchange-rate-adjustment-catch-up-growth http://hdl.handle.net/10986/7035 |
| _version_ |
1764401785120751616 |