Abstract
Pakistan is placed among the family of aid dependent developing countries and this characteristic of Pakistan’s economy makes it a pertinent case for scrutinizing budgetary response to aid. The present study looks at the impact of disaggregated aid flows on key fiscal variables in Pakistan using a fiscal response model applied to time series data over the period 1972 to 2016. The findings of the study paint quite a dismal picture prevailing in the country. Aid loans and grants are largely earmarked for development and non-development public spending respectively, and they tend to displace tax revenue in the country which is a grave adverse fiscal consequence of aid for the country.
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Article Details
- Year: 2021
- Volume: 42
- Issue: 4
- Pages: 27 - 52
- Accepted: 25.05.2021
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DOI:
https://doi.org/10.5281/zenodo.17053247 -
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How to Cite?
Tahir Mukhtar, Markus Brueckner (2021). Fiscal Response to Foreign Aid in an Aid-Recipient Economy: Reassessment for Pakistan. Journal of Economic Cooperation and Development, 42(4), 27-52. https://doi.org/10.5281/zenodo.17053247
