Measuring absorptive capacity constraints to foreign aid

Growth, Poverty and Development Assistance: When Does Foreign Aid Work?

“…8. On this model see later studies and reviews (Islam, 2005;Gyimah-Brempong et al, 2012;Wagner, 2008;Feeny and de Silva, 2012;Feeny and McGillivray, 2011). 9.…”

Aid Effectiveness for Poverty Reduction: Lessons from Cross‑country Analyses, with a Special Focus on Vulnerable Countries

“…This issue has been mainly addressed with regard to possible decreasing marginal returns to aid, evidenced by the positive coefficient of the aid variable combined with the negative coefficient of its squared value. Several studies had found such results (beginning by Burnside and Dollar 2000, Collier and Dollar, 2001, 2002, Hansen and Tarp 2000, 2001, Lensink and White 2000, with a corresponding threshold where the marginal contribution of aid to growth becomes nil, which reflects limited absorptive capacity for aid (see Feeny and de Silva, 2013, for a recent contribution). Besides, an upper threshold due to absorptive capacity, there may be also a minimum level of aid needed for effectiveness, justifying the need for a "big push" (Gomanee et al 2003, Guillaumont andGuillaumont Jeanneney 2010).…”

Remittances Impact on Economic Growth, Domestic Savings and Domestic Capital at the Presence of ODA and FDI in Selected MENA Countries

“…Each country or region has an absorption capacity that expresses the country ability to effectively and productively using capital. As well as not all aid provided to utilize the profitable investment opportunities, therefore, there is a limit for using aid in efficient way, Feeny, & de Silva, (2012). These limits or constrains has many types, which are policy and institutional, capital constraints, manner to deliver aid and social, cultural constraints Feeny, & de Silva, (2012);Feeny and McGillivray, (2011) and intra allocation of aid between sectors that one of the strongest constraints in the region.…”

“…As well as not all aid provided to utilize the profitable investment opportunities, therefore, there is a limit for using aid in efficient way, Feeny, & de Silva, (2012). These limits or constrains has many types, which are policy and institutional, capital constraints, manner to deliver aid and social, cultural constraints Feeny, & de Silva, (2012);Feeny and McGillivray, (2011) and intra allocation of aid between sectors that one of the strongest constraints in the region. Any relaxing of these constraints can extend the aid contribution to growth and increase the absorption capacity, as presented in figure 1, this calls for aid environment improvement in the region.…”

“…In addition, other literature discuss the relationship between the level of aid and its incremental impact on growth that takes the form of an inverted-U shape, Feeny, & de Silva, (2012). Each country or region has an absorption capacity that expresses the country ability to effectively and productively using capital.…”