The Fiscal Effects of Aid in Ethiopia: Evidence from CVAR Applications

ABSTRACT

This article explores the fiscal effects of aid in Ethiopia using the Cointegrated Vector Auto-Regressive (CVAR) methodology to model complex long-run and short-run dynamics. We use national data for 1961–2010, including a measure of aid capturing flows through the budget as measured by the recipient. The data suggests three main conclusions on the long-run equilibrium. First, government long-term spending plans are based on domestic sources, treating aid as an additional source of revenue. Second, both grants and loans are positively related to tax revenue. Third, aid is positively associated with spending, with a particularly strong relation between capital expenditure and grants. Overall, our results show that aid in Ethiopia had beneficial fiscal effects.     

Compensatory Aid and Debt Relief: A Case Study of Uganda

We propose a contingency financing framework to assist low-income countries in the achievement of debt sustainability. The framework relies on an accounting method to quantify external shocks to the balance of payments and provides compensatory financing to offset their impact. We apply the framework to the case of Uganda during the period 1988–2002 and find that it would have been highly effective in identifying and offsetting the adverse liquidity implications of shocks to the country's trade balance.     

Public Nursery School Costs and the Effects of the Funding Reforms in Japan

Using a panel dataset of 983 municipalities across Japan, this article investigates the impact of the funding reforms in 2004 on public nursery schools’ operating costs. We found that municipalities responded differently to the reforms, depending on their fiscal strength and city scale. In areas with relatively large populations, fiscally stronger municipalities were likely to spend less on public nursery schools in the wake of the reforms, while municipalities in smaller cities spent more. Besides, municipalities that were not compensated for the loss of the national subsidy reduced expenditures in large cities. In small cities, on the other hand, such municipalities actually increased expenditures.     

Social Network Effects on Mobile Money Adoption in Uganda

This study analyses social network effects on the adoption of mobile money among rural households in Uganda. We estimate conditional logistic regressions controlling for correlated effects and other information sources. Results show that mobile money adoption is positively influenced by the size of the social network with which information is exchanged. We further find that this effect is particularly pronounced for non-poor households. Thus, while social networks represent an important target for policy-makers aiming to promote mobile money technology, the poorest households are likely to be excluded and require more tailored policy programmes and assistance.     

Intergovernmental Fiscal Transfers and Fiscal Capacity

An intergovernmental fiscal transfer is an instrument used by governments to equalize fiscal capacity. However, with the large discrepancies in fiscal capacity among Local Authorities (LAs) in Kenya, it is evident that the intention of the instrument has not been met. These disparities lead to inequity as some LAs receive better services for their tax, while others do not.

Using panel data from 2001-2006 among 22 LAs, the Local Authority Transfer Fund (LATF) was found to be high in LAs that had substantial fiscal capacities. This suggests the need to revise the formula used in computing LATF.     

Persuasion and Predation: The Effects of U.S. Military Aid and International Development Aid on Civilian Killings

ABSTRACT

Powerful states frequently employ foreign aid to pursue international security objectives. Yet aid's effectiveness will be undermined if it exacerbates the effects of conflict on civilians within recipient states. This article investigates how international development aid and U.S. military aid influence recipient governments' incentives and ability to target civilians. U.S. military aid has a persuasion effect on state actors, which decreases a recipient state's incentives and necessity to target civilians. Development aid flows, however, trigger a predation effect in some environments, exacerbating civilian targeting. An analysis of aid flows in 135 countries on civilian killings between 1989–2011 provides support for both the persuasion and predation effects associated with aid.     

Effects of Budgetary Constraints on HR Reforms in Central Public Administrations and the Importance of Institutional Context

A standard criticism toward New Public Management has been its focus on efficiency and cost saving. As a consequence, other important reform objective aspects and administrative values such as quality, fairness, engagement, trust, and sustainability would be neglected. In the field of HRM, this again would result in many (un-)intentional reform effects, such as more demotivation, less engagement, and less trust of the workforce in leadership. Unfortunately, many of these claims have not been tested empirically.Especially in the field of HRM, there is very little comparative evidence on how costs are being cut on a grand scale in different institutional contexts, Human Resource Management policies, with regard to different HR instruments and how these cuts impact on Human Resource Management.This study investigates the current HR reforms in central public administration in 32 OECD countries. Using recent OECD data (OECD Data Set, 2015), the study analyses the impact of budgetary constraints with regard to 40 HR issues and HR instruments. These issues were grouped into different HR bundles. The analysis reveals a strong correlation between budgetary constraints and cost-cutting measures. As a consequence, HRM as such is changing dramatically in some countries. Whereas the past reform trends in most OECD countries were characterized by a move away from the classical bureaucratic model, the present focus is on the implementation of ad hoc reforms in order to save resources. Neither is there a common trend toward one alternative high-work performance model nor a reformed universal “bureaucracy-lite mode.” Overall, data show that HR management is not seen as a strategic factor in the reform process in many countries. In fact, most countries have focused on cost reductions and downsizing and not on responsible restructuring.     

Refining the Concepts of Territorial Revenue Assignment,Substate Fiscal Self-rule and Territorial Fiscal Balance

Fiscal federalism has offered a template for understanding intergovernmental fiscal relations. Yet when politicians are involved in day-to-day decentralization it may happen that some of the normative elements of fiscal federalism do not fit reality. Substate entities may go beyond the own-source paradigm and have a practical interest in alternative forms of fiscal self-rule. To better understand this pragmatism a threefold stage model of territorial revenue assignment is presented drawing on some insights offered by Germany’s fiscal constitution. Within this framework a reassessment of the role of territorial levels as levels during vertical revenue assignment is undertaken, a new typology of fiscal self-rule is introduced, and finally a theory of multiple territorial fiscal balance points is outlined, including the one based on the real domain of substate own policy-making.     

Nationality and Nationalism in Africa: the Uganda case

Depuis 2006 et l'exode de migrants ouest-africains tentant de rejoindre l'Europe à bord de pirogues, la lutte contre l'émigration clandestine a été mise à l'agenda des relations afro-européennes. A partir de l'étude du tissu associatif et non-gouvernemental sénégalais, plus particulièrement d'une initiative féminine de la banlieue dakaroise, cet article souhaite revenir sur les conditions d'émergence et de possibilité d'un tel agenda et des mobilisations collectives y ayant trait. Le consensus relatif entre acteurs du Nord et du Sud concernant la lutte contre l'émigration irrégulière provient de l'articulation, dans une conjoncture d'urgence, de facteurs qui tiennent aux conditions structurelles d'insertion à l'international des acteurs du Sud, d'effets d'aubaine et de cadrages interprétatifs rendus compatibles. L'internationalisation d'acteurs sénégalais en charge de cet agenda a alors eu pour conséquences de générer un registre d'action victimaire, contraignant toute action protestataire, et de nourrir factionnalisme et concurrence au sein des champs associatif et politique, locaux et nationaux.     

Food Aid and Malnutrition in Developing Countries: Evidence from Global Food Aid Allocation

This study investigates the allocation of dietary energy, iron, vitamin A and zinc within global food aid. The response of US and non-US donors to nutritional needs and donor interests is estimated with a dynamic correlated random effects Tobit model. Aid flows of the period 1993–2007 are analysed. The empirical results show that nutrient shipments in emergency food aid have been allocated towards poorer countries, but also face inertia and media bias. Project food aid from the US is found to be targeted towards politically stable and rural regions, while non-US project aid focuses on populations with high nutritional requirements.     

Fiscal Federalism in Australia

Australia displays high vertical fiscal imbalance (VFI) for historical and constitutional reasons. It also attempts to achieve the highest degree of horizontal fiscal equalization (HFE) to be found in any democratic federation. The Commonwealth Grants Commission (CGC), a non-partisan body at arm's length from politicians, oversees the regime. A recent report claims that equity, efficiency and transparency would all improve if the regime were abolished. Such a change is politically unachievable, but it raises interesting issues in public finance and public administration, which carry over to other federations and union states.
An economically efficient system would: minimize perverse incentives, especially incentives to seek rent; encourage states to grow; discourage suboptimal location decisions; minimize transaction costs. An equitable system would maximize equity between relevantly similar individuals. Aspects of the Australian system that should be copied include the non-partisan agency and the target of HFE between component parts of the country. Aspects that should be discussed and perhaps copied include the very extensive equalization, including the feature of equalizing away the effects of grants for special purposes. Aspects that should probably not be copied include the cumbersome formulae and some of the perverse methods of calculating for 'needs'. All abbreviations and acronyms are spelt out in the Appendix on page 37.     

The Income Lever and the Allocation of Aid

Abstract

The article develops a concept and a measure of the monetary capacity of a country to reduce its own poverty and shows how these tools can be used to guide budget allocations or the allocation of aid. The authors call this concept the income lever. Making use of tax and distributive theory, the article shows how different redistributive criteria correspond to the different normative criteria of the income lever. It then constructs various income lever indexes based on these criteria and uses such indexes to rank countries according to their own capacity to reduce poverty.     

Petty and grand corruption and the conflict dynamics in Northern Uganda

This study explores the relationship between corruption and conflict in northern Uganda, using the perspectives of local business owners as an inroad. The purpose is to highlight how various types of corruption can be related to conflict dynamics in different ways, depending on the context. The article argues that in post-war northern Uganda grand corruption can be seen as related to the conflict dynamics, while petty corruption is generally not seen that way. At the centre of the conflict in northern Uganda lies a deep mutual mistrust between the population in the north and the central government. Therefore corruption in the public sector that occurs at the central level, in particular with regard to funds aimed at the north, tends to be associated with the conflict, whereas the various types of petty corruption encountered by local businesspersons in Gulu, the largest town in northern Uganda, are seen by these actors as normal or as ‘the way things are’.     

Fairtrade and Labour Markets in Ethiopia and Uganda

Drawing on four years of fieldwork in Ethiopia and Uganda, this paper addresses gaps in knowledge about the mechanisms linking agricultural exports with poverty reduction, the functioning of rural labour markets, and the relevance to the lives of the poorest people of Fairtrade. Statistical analysis of survey evidence, complemented by qualitative research, highlights the relatively poor payment and non-pay working conditions of those employed in research sites dominated by Fairtrade producer organisations. We conclude that Fairtrade is not an effective way to improve the welfare of the poorest rural people.     

Financial Access and Exclusion in Kenya and Uganda

Policy emphasis has recently shifted to ‘Finance for All’ given evidence that financial sector development contributes to growth but effects on poverty do not arise from pro-poor provision. We argue that, given this policy goal, analyses of barriers to access must be country specific and go beyond the emphasis on transactions costs to incorporate the effects of social institutions since these contribute to discrimination. This paper uses data from Financial Access Surveys carried out in 2006 in Kenya and Uganda to investigate the socio-economic, demographic and geographical factors influencing access to and exclusion from formal, semi-formal and informal financial services.     

A client-community assessment of the NGO sector in Uganda

Using original data from client-community assessments, we examine motivations in the Ugandan NGO sector. In general, client-community satisfaction with NGO interventions is high, even though some NGO staff are viewed as unresponsive, underskilled, or self-serving. We find evidence that NGOs endeavour to redress the balance between rich and poor, although more remote communities suffer neglect, possibly for cost reasons. NGOs are less inclined to maintain a permanent presence in more remote and poorer client-communities, which impacts negatively on their assessment scores. We also find evidence that NGOs too often operate in the same location, resulting in some duplication of effort. Finally, results indicate that community participation enhances satisfaction.     

Entrepreneurship and Participation in Public Management Reforms at the Local Level

This article seeks to discuss who the policy entrepreneurs are and who participates in the policy-making process of public management reforms at the local level. In order to answer the research questions, a multi-unit and multi-case research study was carried out in three municipal governments: Barcelona, Boston and Turin. The subjects of the study were 15 innovations in management implemented between 1992 and 2007. The first conclusion is that politicians predominantly take the entrepreneurial role in introducing innovations in public management, regardless of the technicality of the innovation. As far as political participation is concerned, public management reforms are still dealt with as in-house matters, even when public managers want to be recognised as promoting the positive values of political participation.     

Beyond the nation: global democratisation in Uganda and the politics of dispensation

Global frameworks for democratic development today tend to remain within a comparative lens where each country is treated as a sovereign capsule. This portrait eludes the political structures that accompany contemporary globalisation and set the conditions for domestic development. Notably, the comparative perspective eschews the hierarchical nature of states and influential non-state actors that impact democracy movements. Merging international relations theory and comparative politics and using the example of Uganda to illustrate, I create ‘the politics of dispensation.’ Like a doctor dispensing a pill to a patient, Uganda shows how susceptible a country can be to forces beyond democratic control.