Aid and the Dutch Disease in Low-Income Countries : Informed Diagnoses for Prudent Prognoses /

This paper demonstrates that the Dutch disease need not materialize in low-income countries that can draw on their idle productive capacity to satisfy the aid-induced increased demand. Diagnoses on, and prognoses for, the Dutch disease should take into account country-specific circumstances to avoid...

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Bibliographic Details
Main Author: Nkusu, Mwanza
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 2004.
Series:IMF Working Papers; Working Paper ; No. 2004/049
Online Access:Full text available on IMF
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520 3 |a This paper demonstrates that the Dutch disease need not materialize in low-income countries that can draw on their idle productive capacity to satisfy the aid-induced increased demand. Diagnoses on, and prognoses for, the Dutch disease should take into account country-specific circumstances to avoid ill-advised policies. The paper emphasizes that using public resources inefficiently can be more painful than real exchange rate appreciations, which may not necessarily embody the Dutch disease. 
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