The Economics of Post Conflict Aid

By James McHugh, Theodora Kosma, Dimitri G Demekas

November 1, 2002

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Format: Chicago

James McHugh, Theodora Kosma, and Dimitri G Demekas. The Economics of Post Conflict Aid, (USA: International Monetary Fund, 2002) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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, on the other hand, may increase the long-run capital stock and, if carefully designed, avoid the pitfalls of the Dutch disease.

Subject: Capital accumulation, Consumption, Development assistance, Foreign aid, Labor supply

Keywords: Capital stock, WP

Publication Details

Pages:

36
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2002/198
Stock No:

WPIEA1982002
ISBN:

9781451860078
ISSN:

1018-5941

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