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Aid and Government Fiscal Behavior: Assessing Recent Evidence

Morrissey, Oliver



This paper reviews evidence published in the last 10 years that has added to our understanding of the effects of aid on government spending and tax effort in recipient countries, with a discussion of when (general) budget support is a fiscally efficient aid modality. Three generalizations are permitted by the evidence: aid finances government spending; the extent to which aid is fungible is over-stated and even where it is fungible this does not appear to make the aid less effective; and there is no systematic effect of aid on tax effort. Beyond these conclusions effects are country-specific.


Morrissey, O. (2015). Aid and Government Fiscal Behavior: Assessing Recent Evidence. World Development, 69, 98-105.

Journal Article Type Article
Acceptance Date Nov 21, 2013
Online Publication Date Jan 29, 2014
Publication Date 2015-05
Deposit Date Sep 4, 2015
Publicly Available Date Sep 4, 2015
Journal World Development
Print ISSN 0305-750X
Electronic ISSN 0305-750X
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 69
Pages 98-105
Keywords aid, fiscal effects, fungibility, budget support
Public URL
Publisher URL
Copyright Statement Copyright information regarding this work can be found at the following address:


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