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Fiscal implications of AIDS in South Africa
Stockholm University, Faculty of Social Sciences, Department of Economics.
2007 (English)In: European Economic Review, ISSN 0014-2921, Vol. 51, no 7, 1614-1640 p.Article in journal (Refereed) Published
Abstract [en]

The number of people living with HIV is alarmingly large. In addition to the incomprehensible human suffering of those directly affected, AIDS also has large, negative economic effects. In this paper, I study the fiscal implications of the HIV/AIDS epidemic in South Africa in a standard neoclassical growth model. I find that an antiretroviral program is to a large extent self financing. Improvement in dependency ratios and health care cost savings would pay for Rand 144 billion of a full epidemiological intervention. The indirect effect through the changing demographic structure will be more important than the direct health care cost saving effect. I also explore different taxation policies. The households would be willing to sacrifice an amount equal to 12% of GDP in the first period to be subject to an optimal (Ramsey) fiscal policy rather than an alternative fixed debt to GDP policy. The optimal policy implies an increase in government debt during the peak of the epidemic.

Place, publisher, year, edition, pages
2007. Vol. 51, no 7, 1614-1640 p.
Keyword [en]
AIDS, Fiscal impact, Economic impact, Fiscal policy, Taxation
National Category
Economics
Identifiers
URN: urn:nbn:se:su:diva-16663DOI: 10.1016/j.euroecorev.2006.12.003ISI: 000250650700002OAI: oai:DiVA.org:su-16663DiVA: diva2:183183
Available from: 2008-12-20 Created: 2008-12-20 Last updated: 2009-05-05Bibliographically approved
In thesis
1. Studies of the relationship between aid and trade and the fiscal implications of emigration and HIV/AIDS interventions
Open this publication in new window or tab >>Studies of the relationship between aid and trade and the fiscal implications of emigration and HIV/AIDS interventions
2009 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis consists of three studies; two on fiscal effects of demographic change and one on the correlation between international aid and trade flows.

 Fiscal Implications of Emigration. This study examines the fiscal effects of emigration. A dynamic macroeconomic framework is used. The net present value of the fiscal effects of different types of individuals' emigration decisions is calculated. Individuals are differentiated with relation to age, gender, education, being immigrants or born in Sweden and how long they choose to stay abroad in case of emigration. The study explores how the fiscal effects of emigration are contingent on these different personal characteristics and it is applied to the case of emigration from Sweden in 1998. The estimated aggregate fiscal cost is 0.62% of GDP. This cost is significantly larger than the cost of immigration.

 Fiscal Implications of AIDS in South Africa. In this paper, I study the fiscal implications of the HIV/AIDS epidemic in South Africa in a standard neoclassical growth model. I find that an antiretroviral program is to a large extent self financing. An improvement in dependency ratios and health care cost savings would pay for Rand 144 billion of a full epidemiological intervention. The indirect effect through the changing demographic structure will be more important than the direct health care cost saving effect.

 Tied Aid, Trade-Facilitating Aid or Trade-Diverting Aid? Donor aid is often regarded as being informally tied (aid increases donor-recipient exports). However, in this paper, using a gravity model, we show that aid is also positively associated with recipient-donor exports. That is, aid increases bilateral trade flows in both directions. Our interpretation is that an intensified aid relation reduces the effective cost of geographic distance. We find a particularly strong relation between aid in the form of technical assistance and exports in both directions.

Place, publisher, year, edition, pages
Stockholm: Department of Economics, Stockholm University, 2009. 126 p.
Series
Dissertations in Economics (Stockholm), ISSN 1404-3491 ; 2009:4
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:su:diva-26668 (URN)978-91-7155-841-1 (ISBN)
Public defence
2009-06-03, hörsal 4, hus B, Universitetsvägen 10, Stockholm, 10:00 (English)
Opponent
Supervisors
Available from: 2009-05-13 Created: 2009-04-06 Last updated: 2011-04-06Bibliographically approved

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