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Donor funding and crowding out of public spending: Evidence from low and middle-income countries
In many low-resource settings agricultural output and public spending on agriculture are in decline, raising questions about the effectiveness of agricultural aid. To understand why these trends are occurring, we examined factors that affect the share of government spending on agriculture. Using a s...
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| Format: | Thesis |
| Language: | English |
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Research of GSB
2018
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| _version_ | 1867613173889105921 |
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| access_status_str | Open Access |
| author | Shine, Ritta Sabbas |
| author2 | Alagidede, Paul |
| author_browse | Alagidede, Paul Shine, Ritta Sabbas |
| author_facet | Alagidede, Paul Shine, Ritta Sabbas |
| author_sort | Shine, Ritta Sabbas |
| collection | Thesis |
| description | In many low-resource settings agricultural output and public spending on agriculture are in decline, raising questions about the effectiveness of agricultural aid. To understand why these trends are occurring, we examined factors that affect the share of government spending on agriculture. Using a sample of 66 low- and middle-income countries from 1996-2010 we use dynamic panel regression models to explore: (1) the impact of agricultural aid on public expenditure to agriculture, and (2) the impact of aid on domestic resource mobilisation, which indirectly affects public expenditures. Our results provide evidence of a strong substitution effect, especially in low-income countries, suggesting aid to agriculture is treated as fungible. We also found evidence that aid loans resulted in higher tax revenues, while aid grants decreased tax effort, which may account for decreasing public investment in agriculture. To improve aid effectiveness, donors need to work with recipients to understand country needs and the fiscal environment of the receiving government. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/29047 |
| institution | University of Cape Town (South Africa) |
| language | eng |
| last_indexed | 2026-06-10T12:31:56.645Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2018 |
| publishDateRange | 2018 |
| publishDateSort | 2018 |
| publisher | Research of GSB |
| publisherStr | Research of GSB |
| record_format | dspace |
| source_str | UCTD — University of Cape Town Open Access Repository |
| spelling | oai:open.uct.ac.za:11427/29047 Donor funding and crowding out of public spending: Evidence from low and middle-income countries Shine, Ritta Sabbas Alagidede, Paul Development Finance In many low-resource settings agricultural output and public spending on agriculture are in decline, raising questions about the effectiveness of agricultural aid. To understand why these trends are occurring, we examined factors that affect the share of government spending on agriculture. Using a sample of 66 low- and middle-income countries from 1996-2010 we use dynamic panel regression models to explore: (1) the impact of agricultural aid on public expenditure to agriculture, and (2) the impact of aid on domestic resource mobilisation, which indirectly affects public expenditures. Our results provide evidence of a strong substitution effect, especially in low-income countries, suggesting aid to agriculture is treated as fungible. We also found evidence that aid loans resulted in higher tax revenues, while aid grants decreased tax effort, which may account for decreasing public investment in agriculture. To improve aid effectiveness, donors need to work with recipients to understand country needs and the fiscal environment of the receiving government. 2018-11-07T13:03:52Z 2018-11-07T13:03:52Z 2015 Master Thesis Masters MCom http://hdl.handle.net/11427/29047 eng application/pdf Research of GSB Faculty of Commerce University of Cape Town |
| spellingShingle | Development Finance Shine, Ritta Sabbas Donor funding and crowding out of public spending: Evidence from low and middle-income countries |
| thesis_degree_str | Master's |
| title | Donor funding and crowding out of public spending: Evidence from low and middle-income countries |
| title_full | Donor funding and crowding out of public spending: Evidence from low and middle-income countries |
| title_fullStr | Donor funding and crowding out of public spending: Evidence from low and middle-income countries |
| title_full_unstemmed | Donor funding and crowding out of public spending: Evidence from low and middle-income countries |
| title_short | Donor funding and crowding out of public spending: Evidence from low and middle-income countries |
| title_sort | donor funding and crowding out of public spending evidence from low and middle income countries |
| topic | Development Finance |
| url | http://hdl.handle.net/11427/29047 |
| work_keys_str_mv | AT shinerittasabbas donorfundingandcrowdingoutofpublicspendingevidencefromlowandmiddleincomecountries |