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International development cooperation has experienced large changes in recent years. One spectacular issue is the emergence of new donors, which are playing a more significant role than ever. China, India, Brazil, Russia, and the Arab countries — together with other emerging countries — support developing countries, though their activity is highly criticized by ‘traditional’ donors. The paper aims to analyse the behaviour of emerging donors with reflection on the question whether the additional resources complement or substitute the aid flows from traditional donors. The investigation shows that emerging donors do not behave as traditional donors and their aid allocation is determined by political and economic factors rather than the needs of the recipient countries. However, the statistical analysis reflects on the fact that in some cases emerging donors do behave similarly as traditional donors. Altogether, it is not proven that the additional resources complement existing aid flows.

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Acta Oeconomica
Authors: Anna Burger, Beáta Udvari and Huseyin Karaoguz
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Nowadays, global production networks (GPN) and global value chains (GVC) play an important role in the world economy intensifying the trade and production networks and resulting in products having value-added in different countries. The analysis of how many intermediate products a country imports in order to produce a product and of how many products a country exports to another country in order to produce new products draws the attention to value-added trade. In the present study, we compare the Hungarian and Polish value-added trade of chemicals and chemical products. We use the OECD-WTO data of value-added trade, which is based on an input-output table. By calculating numerous indices, we reveal that the domestic value-added of chemicals and chemical products in the two countries was relatively low and should be increased by adequate economic policy.

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Abstract

Recently, the middle-income trap (MIT) has gained considerable attention – besides European countries, several African, Asian, and Latin-American developing countries are also affected. Many countries have remained in the middle-income bracket for decades, whilst only a few have advanced to high-income status. Felipe et al. in 2012 showed that an annual growth rate of at least 3.5 and 4.7% sustained for a period of 14 and 28 years is required respectively for upper-middle-income and lower-middle-income countries to escape the MIT. Economic growth is influenced by several factors including foreign aid received. Thus, in this study, we aim to answer the question of how aid affects economic growth in middle-income countries and whether aid may contribute to escaping the MIT. Focusing on the countries that have remained in the middle-income group between 1990 and 2017, our analysis confirms that aid contributes to economic growth; however, the impact is positive in the upper-middle-income countries and negative in the lower-middle-income countries. Aid is therefore, likely to be more effective in helping the upper-middle income countries to escape the MIT but not the lower-middle income countries.

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