AID FOR TRADE FLOWS AND POVERTY REDUCTION

2021 ◽  
pp. 1-44
Author(s):  
SÈNA KIMM GNANGNON
Keyword(s):  
Income Inequality ◽  
Poverty Reduction ◽  
Development Aid ◽  
Policy Implications ◽  
Policy Debate ◽  
Product Concentration ◽  
Aid For Trade ◽  
Official Development Aid ◽  
The Empirical Analysis ◽  
Export Product

The effectiveness of Aid for Trade (AfT) interventions, including with respect to recipient countries’ trade performance, has now been well explored in the literature. However, in spite of the voluminous literature on the poverty effect of the total official development aid, the effect of AfT flows on poverty has received little attention on the empirical front. This paper aims to contribute to the policy debate on this matter by investigating the effect of AfT flows on poverty in recipient countries. In particular, the analysis explores whether this effect translates through countries’ level of export product concentration, as the latter can influence income inequality, and hence the transformation of economic growth into poverty reduction in recipient countries. The empirical analysis, based on 100[Formula: see text]AfT recipient countries, has shown that AfT interventions are associated with poverty reduction in countries that diversify their export products, including toward manufacturing products. Additionally, AfT flows dampen the positive poverty effect of income inequality, and lead to greater poverty reduction in countries with a great extent of fiscal redistribution. Finally, the analysis has shown that AfT interventions mitigate the positive poverty effect of import product concentration. These results have important policy implications.

scholarly journals The effect of increasing the minimum wage on poverty and inequality in Bosnia and Herzegovina

2020 ◽  
Vol 65 (226) ◽  
pp. 121-137
Author(s):  
Amela Kurta ◽  
Nermin Oruc
Keyword(s):  
Income Inequality ◽  
Empirical Evidence ◽  
Minimum Wage ◽  
Bosnia And Herzegovina ◽  
Poverty Reduction ◽  
Policy Debate ◽  
Poverty And Inequality ◽  
Future Policy ◽  
Using Data ◽  
Positive Effect

The minimum wage, as a labour market policy with distributive impact, is widely debated in Bosnia and Herzegovina (BiH). This paper estimates the effect of increasing the minimum wage on poverty and income inequality in BiH, providing the first empirical evidence on the minimum wage in the country. Using data from the Household Budget Survey (HBS) for 2015, the effects of four changes (two per entity) in the minimum wage were simulated using the microsimulation model BiHMOD. First, the effect of the latest changes implemented in the previous period was calculated using the previous minimum wage level as the baseline. Second, the effect of recently proposed changes was simulated using the current level as the baseline. The findings suggest that increasing the minimum wage in BiH has a significant positive effect on poverty reduction, but a limited effect on the level of income inequality. The estimated effects were also calculated for different types of households. The results suggest that a single policy may have unexpected effects if other policies are not taken into account and harmonized accordingly. The findings provide empirical evidence for decision-makers and future policy debate, which is generally missing for this and similar policy issues in BiH.

Aid for Trade, Export Product Diversification and Foreign Direct Investment

2020 ◽  
Author(s):  
Sèna Kimm GNANGNON
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Product Diversification ◽  
Product Concentration ◽  
Fdi Inflows ◽  
Aid For Trade ◽  
High Level ◽  
Positive Effect ◽  
Export Product

Abstract The few existing studies on the relationship between Aid for Trade (AfT) flows and Foreign Direct Investment (FDI) inflows tend to report a positive effect of total AfT flows, in particular of Aid flows for building economic infrastructure, on FDI inflows. The present article aims to complement these works by investigating whether the effect of AfT flows on inward FDI stock depends on recipient-countries' level of export product concentration. The empirical analysis has shown that AfT flows exert a strong positive effect on inward FDI stock in countries that experience a high level of export product concentration. These findings are relevant for developing countries in light of the concentration of their export products on primary commodities, and given the strong role of FDI flows for employment generation, economic growth and development in these countries.

Do Financial Flows Make a Difference in Fragile States?

2021 ◽  
pp. 449-492
Author(s):  
Ralph Chami ◽  
Ekkehard Ernst ◽  
Connel Fullenkamp ◽  
Anne Oeking
Keyword(s):  
Foreign Direct Investment ◽  
Direct Investment ◽  
Poverty Reduction ◽  
Development Aid ◽  
Positive Contribution ◽  
Fragile States ◽  
Decent Work ◽  
Financial Flows ◽  
Weak Institutions ◽  
Official Development Aid

A rising number of people is living in fragile countries whose weak institutions fail to deliver on decent work and poverty reduction. The chapter discusses to what extent external financial flows, such as remittances, foreign direct investment or official development aid, can substitute for weak institutions. Fragility matters: fragile countries receive different amounts of financial flows than their non-fragile peers, and these flows affect them differently. Fragility lowers the effect of financial flows on growth, living standards and inequality. Foreign direct investment (FDI) has a moderate impact on poverty alleviation, albeit concentrated on employment gains in mining and natural resources. Remittances provide some weak relief for the poor, with less pernicious effects on growth and labour supply than in non-fragile countries. ODA does not improve social outcomes but rather exacerbates fragility. Policymakers should focus on improving upon the positive contribution of FDI and remittances on jobs and growth, avoiding the remittances trap.

scholarly journals Export Product Diversification, Poverty and Tax Revenue in Developing Countries

2020 ◽  
Author(s):  
Sena Kimm Gnangnon
Keyword(s):  
Developing Countries ◽  
Product Diversification ◽  
Tax Revenue ◽  
Product Concentration ◽  
Full Sample ◽  
Generalized Methods Of Moments ◽  
Methods Of Moments ◽  
The Empirical Analysis ◽  
Export Product ◽  
Export Product Diversification

The current paper has examined the effect of both export product diversification and poverty on non-resource tax revenue in developing countries. The analysis has used an unbalanced panel dataset of 111 countries over the period 1980-2014. Based on the Blundell and Bond two-step system Generalized Methods of Moments technique, the empirical analysis has shown interesting findings. Export product concentration and poverty influence negatively non-resource tax revenue over the full sample, but this effect varies across countries in the sample. Furthermore, the effect of export product diversification on non-resource tax revenue performance depends on the level of poverty. It appears that export product diversification influences positively non-resource tax revenue performance in countries that experience lower poverty rates. From a policy perspective, these findings show that policies in favour of diversifying export product baskets and reducing poverty would contribute to enhancing non-resource tax revenue performance in developing countries.

scholarly journals Effect of Poverty on Financial Development in Developing Countries

2020 ◽  
Author(s):  
Sena Kimm Gnangnon
Keyword(s):  
Developing Countries ◽  
Financial Development ◽  
Poverty Reduction ◽  
Trade Openness ◽  
Product Concentration ◽  
Education Levels ◽  
Generalized Methods Of Moments ◽  
Reduction Effect ◽  
Methods Of Moments ◽  
Export Product

Numerous studies in the literature have investigated the effect of financial development on poverty, and tend to report a poverty reduction effect of financial development. The present paper considers the issue in the other way around, by examining the effect of poverty on financial development. In particular, it has investigated the financial development effect of poverty that passes through three main channels, including the education level, the level of trade openness, and the degree of export product concentration. The analysis is carried out using a sample of 97 developing countries over the period 1980-2017, and the two-step Generalized Methods of Moments (GMM). Results have shown that poverty genuinely affects financial development through these three channels. Specially, lower poverty rates induce greater financial development in countries that experience higher education levels. Similarly, a rise in poverty rates in the context of restrictive trade policies (that eventually result in lower levels of trade openness) undermines the development of the financial sector. Finally, higher poverty levels adversely affect financial development in countries that experience an increase in the level of export product concentration.

Donors’ Trade and Their Supply of Development Aid Related to the Trade Sector: Does Donors’ Output Gap Matter?

2018 ◽  
Vol 09 (01n02) ◽  
pp. 1850002
Author(s):  
Sèna Kimm Gnangnon
Keyword(s):  
Trade Balance ◽  
Developed Countries ◽  
Development Aid ◽  
Output Gap ◽  
Goods And Services ◽  
Trade Sector ◽  
Official Development Aid ◽  
The Impact ◽  
The Empirical Analysis ◽  
Developing And Developed Countries

This paper complements the literature on the impact of donor-countries’ trade on their supply of Official Development Aid relating to the trade sector (ODATRADE). It investigates whether the impact of donor-countries’ trade balance (including overall trade balance in goods and services, trade balance in goods vis-à-vis developing and developed countries, and trade balance in services) on ODATRADE depends on the level of donor-countries’ output gap. Relying on a sample of 22 donor-countries over the period 1967–2015, the empirical analysis shows that donors’ output gap does matter for the impact of trade balance variables on ODATRADE.

scholarly journals Do Donors Provide Higher AfT Flows to Recipient-Countries that Diversify Export Products or Is It the Other Way Around?

2020 ◽  
Author(s):  
Sena Kimm Gnangnon
Keyword(s):  
Developed Countries ◽  
The Other ◽  
Least Developed Countries ◽  
Product Concentration ◽  
Aid For Trade ◽  
Manufactured Exports ◽  
Export Product

This article has explored whether Aid for Trade (AfT) flows that accrue to recipient-countries depend on the latter's level of export product concentration. The analysis covers a sample of 133 countries over the period 2002-2017. The findings indicate that least developed countries (LDCs) receive higher AfT flows when they experience a rise in the level of export product concentration, while NonLDCs enjoy higher AfT flows when they diversify export products. Interestingly, higher amounts of AfT accrue to countries that diversify their export product basket towards manufacturing products, although different result patterns appear for the components of manufactured exports.

Do Donors provide higher Aid for Trade flows to Recipient-Countries that Diversify Export Products or Is It the Other Way Around?

2021 ◽  
pp. 097674792110366
Author(s):  
Sèna Kimm Gnangnon
Keyword(s):  
Developed Countries ◽  
Trade Flows ◽  
The Other ◽  
Least Developed Countries ◽  
Product Concentration ◽  
Aid For Trade ◽  
Manufactured Exports ◽  
Export Product

This article has explored whether Aid for Trade (AfT) flows that accrue to recipient-countries depend on the latter’s level of export product concentration. The analysis covers a sample of 132 countries over the period 2002–2017. The findings indicate that least developed countries (LDCs) receive higher AfT flows when they experience a rise in the level of export product concentration, while NonLDCs enjoy higher AfT flows when they diversify export products. Interestingly, higher amounts of AfT accrue to countries that diversify their export product basket towards manufacturing products, although different result patterns appear for the components of manufactured exports. JEL: F35; F14; O14

Israel’s Foreign Aid to Africa & UN Voting: An Empirical Examination

2019 ◽  
Vol 25 (4) ◽  
Author(s):  
Carmela Lutmar ◽  
Leah Mandler
Keyword(s):  
Foreign Aid ◽  
Development Aid ◽  
Policy Implications ◽  
Long Term Effects ◽  
African Countries ◽  
Empirical Examination ◽  
International Support ◽  
Bilateral Relations ◽  
Using Data ◽  
Official Development Aid

AbstractAccording to International Relations scholarship, the main formal motivation for foreign aid is usually the unexpressed expectation for improvement of bilateral relations and overall international support. There is an anticipation that aid recipients will not “forget” their donors on the international stage, in particularly during important sessions at the UNGA. We test this assertion empirically on the case of Israeli foreign aid to African countries, using data on Israeli Official Development Aid provisions between 1997 and 2014, and data on voting patterns of aid recipients in the UN General Assembly (UNGA). Our results testify that Israeli bilateral humanitarian foreign aid not only has not provided its expected diplomatic revenues, but may perhaps even hindered African states’ support in the UN. Concomitantly, our results testify that Israeli Official Development Aid (ODA) does not have the anticipated long term effects on international support towards Israel, but instead only a short-lived influence. The results are informative about the usefulness of foreign aid as a diplomatic tool, with important policy implications for decision makers in Israel and worldwide.

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