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Aid allocation, poverty reduction and the Assessing Aid report

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Author Info

  • Robert Lensink

    (Faculty of Economics, University of Groningen, The Netherlands)

  • Howard White

    (Institute of Development Studies, University of Sussex, UK)

Abstract

Assessing Aid argues that aid should be reallocated in favour of poor countries with good policies. This argument is based on a model in which poverty depends on growth, and growth on aid, the impact of aid being higher in countries with good policies. So-called 'poverty-efficient' aid allocations are thus calculated, which are shown to be at odds with those of bilateral donors. There are a number of theoretical and empirical shortcomings in this work. First, aid can affect poverty through channels other than growth. Second, what constitutes 'good policies' is debatable. Third, the empirical estimates are very sensitive to changes in model specification and sample. This paper critically reviews these three issues and finds the poverty-oriented aid reallocations implied in Assessing Aid to be an unreliable guide to policy. Copyright © 2000 John Wiley & Sons, Ltd.

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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of International Development.

Volume (Year): 12 (2000)
Issue (Month): 3 ()
Pages: 399-412

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Handle: RePEc:wly:jintdv:v:12:y:2000:i:3:p:399-412

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Web page: http://www3.interscience.wiley.com/journal/5102/home

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References

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  1. Alejandro Ramirez & Gustav Ranis & Frances Stewart, . "Economic Growth and Human Development -," QEH Working Papers qehwps18, Queen Elizabeth House, University of Oxford.
  2. Robert Lensink & Howard White, 2000. "Assessing Aid: A Manifesto for Aid in the 21st Century?," Oxford Development Studies, Taylor & Francis Journals, vol. 28(1), pages 5-18.
  3. Lucia Hanmer & Robert Lensink & Howard White, 2003. "Infant and child mortality in developing countries: Analysing the data for Robust determinants," Journal of Development Studies, Taylor & Francis Journals, vol. 40(1), pages 101-118.
  4. Henrik Hansen & Finn Tarp, 2000. "Aid effectiveness disputed," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(3), pages 375-398.
  5. Howard White, 1999. "Global poverty reduction: are we heading in the right direction?," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(4), pages 503-519.
  6. Alejandro Ramirez & Gustav Ranis, 1997. "Economic Growth and Human Development," Working Papers 787, Economic Growth Center, Yale University.
  7. Cline, William R. & Sargen, Nicholas P., 1975. "Performance criteria and multilateral aid allocation," World Development, Elsevier, vol. 3(6), pages 383-391, June.
  8. Filmer, Deon & Pritchett, Lant, 1997. "Child mortality and public spending on health : how much does money matter?," Policy Research Working Paper Series 1864, The World Bank.
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Citations

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Cited by:
  1. Baulch, Bob, 2006. "Aid distribution and the MDGs," World Development, Elsevier, vol. 34(6), pages 933-950, June.
  2. Armah, Stephen E. & Nelson, Carl H., 2008. "Is Foreign Aid Beneficial for Sub-Saharan Africa? A Panel Data Analysis," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6356, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  3. Sergio Tezanos Vázquez, 2009. "Geopolítica de la ayuda ¿Cómo optimizar el impacto de la ayuda sobre el crecimiento?," Documentos de trabajo sobre cooperación y desarrollo 200903, Cátedra de Cooperación Internacional y con Iberoamérica (COIBA), Universidad de Cantabria.
  4. TEZANOS, Sergio, 2009. "Geopolítica De La Ayuda. ¿Cómo Optimizar El Impacto De La Ayuda Sobre El Crecimiento?," Estudios Economicos de Desarrollo Internacional, Euro-American Association of Economic Development, vol. 9(2), pages 55-88.
  5. Dehn, Jan, 2000. "The effects on growth of commodity price uncertainty and shocks," Policy Research Working Paper Series 2455, The World Bank.
  6. McGillivray, Mark, 2004. "Descriptive and prescriptive analyses of aid allocation: Approaches, issues, and consequences," International Review of Economics & Finance, Elsevier, vol. 13(3), pages 275-292.
  7. Jeff Dayton-Johnson & John Hoddinott, 2003. "Aid, policies and growth, redux," Department of Economics at Dalhousie University working papers archive redux2, Dalhousie, Department of Economics.
  8. Boriana Yontcheva & Nadia Masud, 2005. "Does Foreign Aid Reduce Poverty? Empirical Evidence From Nongovernmental and Bilateral Aid," IMF Working Papers 05/100, International Monetary Fund.
  9. Sergio Tezanos Vázquez, 2010. "Ayuda y crecimiento: una relación en disputa," Documentos de trabajo sobre cooperación y desarrollo 201001, Cátedra de Cooperación Internacional y con Iberoamérica (COIBA), Universidad de Cantabria.
  10. Thilak Ranaweera, 2004. "Ghost of the financing gap: an overlooked aspect of the aid debate," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(4), pages 637-652.
  11. Jan Dehn, 2000. "Commodity Price Uncertainty and Shocks: Implications for Economic Growth," Economics Series Working Papers WPS/2000-10, University of Oxford, Department of Economics.
  12. Howard White, 2001. "Will the new aid agenda help promote poverty reduction?," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(7), pages 1057-1070.

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