Roads out of Poverty? Assessing the Links between Aid, Public Investment, Growth, and Poverty Reduction

The authors develop a macroeconomic framework that captures links between aid, public investment, growth, and poverty. Public investment is disaggregated into education, infrastructure, and health, and affects both aggregate supply and demand. Dutch disease effects are captured by accounting for changes in the relative price of domestic goods. The authors assess the impact of policy shocks on poverty by linking the model to a household survey. They calibrate the model for Ethiopia and simulate the changes in the allocation of aid and public investment. The authors also calculate the amount by which foreign aid should increase to reach the poverty targets of the Millennium Development Goals.

Bibliographic Details

Main Authors:	Agénor, Pierre-Richard, Bayraktar, Nihal El, Aynaoui, Karim
Language:	English
Published:	World Bank, Washington, DC 2005-01
Subjects:	ABSORPTIVE CAPACITY, ACCELERATOR, ACCELERATOR EFFECT, ACCOUNTING, ADVERSE EFFECTS, AGGREGATE DEMAND, AGGREGATE SUPPLY, BALANCE OF PAYMENTS, BARRIERS TO ENTRY, BORROWING, CAPITAL FORMATION, CENTRAL BANK, COMPETITIVENESS, CONDITIONALITY, CONSUMPTION LEVELS, CURRENCY, DEBT, DEBT RELIEF, DEFICIT FINANCING, DEVELOPMENT ASSISTANCE, DEVELOPMENT ECONOMICS, DIMINISHING RETURNS, DISPOSABLE INCOME, ECONOMETRIC ESTIMATES, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC POLICIES, ECONOMISTS, ELASTICITIES, ELASTICITY, ELASTICITY OF SUBSTITUTION, EMPIRICAL EVIDENCE, EQUILIBRIUM, EXCHANGE RATE, EXOGENOUS SHOCKS, EXOGENOUS VARIABLES, EXPENDITURE, EXPORTS, FINANCIAL MARKETS, FORMAL ANALYSIS, FUNGIBILITY, GDP, GDP PER CAPITA, GINI COEFFICIENT, GROSS DOMESTIC PRODUCT, GROWTH RATE, HUMAN CAPITAL, HUMAN DEVELOPMENT, IMPORTS, INCOME, INCOME DISTRIBUTION, INTEREST PAYMENTS, INTEREST RATE, INTEREST RATES, LABOR MARKET, LABOR SUPPLY, LINKAGES, MACROECONOMIC EFFECTS, MACROECONOMIC POLICIES, MACROECONOMICS, MARGINAL PRODUCTIVITY, MARKET EQUILIBRIUM, MARKET PRICES, MORAL HAZARD, MORAL HAZARD PROBLEMS, PER CAPITA INCOME, PHYSICAL CAPITAL, POLICY DECISIONS, POVERTY LINE, POWER PLANTS, PRIVATE CONSUMPTION, PRIVATE INVESTMENT, PRIVATE SECTOR, PRODUCTION COSTS, PRODUCTION FUNCTION, PRODUCTION INPUTS, PRODUCTION PROCESS, PRODUCTIVITY, PRODUCTIVITY GROWTH, PUBLIC EXPENDITURE, PUBLIC GOODS, PUBLIC INVESTMENT, PUBLIC SERVICES, PUBLIC SPENDING, PUBLIC TRANSPORTATION, PURCHASES, REAL GDP, REAL INCOME, REAL WAGES, SAFETY, SAFETY NETS, SAVINGS, SIDE EFFECTS, STOCKS, TAX REVENUE, TAX REVENUES, TAXATION, TELECOMMUNICATIONS, TERMS OF TRADE, TRADE POLICIES, UNEMPLOYMENT, VALUE OF OUTPUT, WAGE FLEXIBILITY,
Online Access:	http://documents.worldbank.org/curated/en/2005/01/5601860/roads-out-poverty-assessing-links-between-aid-public-investment-growth-poverty-reduction https://hdl.handle.net/10986/8892
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