Fiscal inertia, donor credibility, and the monetary management of aid surges
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 <...
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| Format: | Journal article |
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Elsevier
2010
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| _version_ | 1826272886153805824 |
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| author | Buffie, E O'Connell, S Adam, C |
| author_facet | Buffie, E O'Connell, S Adam, C |
| author_sort | Buffie, E |
| collection | OXFORD |
| description | 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 <em>absorb-and-spend</em> 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 <em>reverse sterilization</em>. |
| first_indexed | 2024-03-06T22:19:39Z |
| format | Journal article |
| id | oxford-uuid:54983f7e-144e-4da7-b591-c186b5a787a4 |
| institution | University of Oxford |
| last_indexed | 2024-03-06T22:19:39Z |
| publishDate | 2010 |
| publisher | Elsevier |
| record_format | dspace |
| spelling | oxford-uuid:54983f7e-144e-4da7-b591-c186b5a787a42022-03-26T16:38:52ZFiscal inertia, donor credibility, and the monetary management of aid surgesJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:54983f7e-144e-4da7-b591-c186b5a787a4Social Sciences Division - DaisyElsevier2010Buffie, EO'Connell, SAdam, CDonors 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 <em>absorb-and-spend</em> 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 <em>reverse sterilization</em>. |
| spellingShingle | Buffie, E O'Connell, S Adam, C Fiscal inertia, donor credibility, and the monetary management of aid surges |
| title | Fiscal inertia, donor credibility, and the monetary management of aid surges |
| title_full | Fiscal inertia, donor credibility, and the monetary management of aid surges |
| title_fullStr | Fiscal inertia, donor credibility, and the monetary management of aid surges |
| title_full_unstemmed | Fiscal inertia, donor credibility, and the monetary management of aid surges |
| title_short | Fiscal inertia, donor credibility, and the monetary management of aid surges |
| title_sort | fiscal inertia donor credibility and the monetary management of aid surges |
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