Will the recent economic downturn, large shocks and debt strains
in donor countries have a ripple effect on bilateral aid?  Era
Dabla-Norris, Camelia Minoiu, Luis-Felipe Zanna 06 April 2011
The onset of the global financial crisis raised widespread
concerns that donor countries would reduce aid flows to
developing countries. The presumption was that expenditure
stimulus packages aimed at quelling the crisis coupled with
revenue shortfalls caused by lower growth, would strain donor
budgets, causing them to cut aid flows. At the same time, demand
for development aid was expected to increase as aid-dependent
countries would likely face reductions in other sources of
external financing, including exports, FDI, portfolio flows, and
remittances. In this context, leaders of multilateral
institutions called for averting aid cuts to avoid “crashing
waves” in aid-dependent economies (IMF 2009, and World Bank
2009).  Although preliminary assessments of the immediate impact
of the crisis on aid flows suggest that it w