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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)

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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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Publisher 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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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. 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. [Downloadable!]
  2. Henrik Hansen & Finn Tarp, 2000. "Aid effectiveness disputed," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(3), pages 375-398.
  3. 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.
  4. McGillivray, M. & White, H., 1993. "Aid Principles and Policy: An operational Basis for the Assessment of Donor Performance," Working Papers - Money, Finance & Development 52, Institute of Social Studies.
  5. Alejandro Ramirez & Gustav Ranis, 1997. "Economic Growth and Human Development," Working Papers 787, Economic Growth Center, Yale University. [Downloadable!]
  6. Ranis, G. & Ramirez, A. & Stewart, F., 1997. "Economic Growth and Human Development," Papers 787, Yale - Economic Growth Center.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Jonathan Beynon, 2003. "Poverty Efficient Aid Allocations - Collier/Dollar Revisited," Working Papers 2, Economics and Statistics Analysis Unit (ESAU), Overseas Development Institute. [Downloadable!]
  2. 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. [Downloadable!]
  3. 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. [Downloadable!]
  4. Dehn, Jan, 2000. "The effects on growth of commodity price uncertainty and shocks," Policy Research Working Paper Series 2455, The World Bank. [Downloadable!]
  5. McGillivray, Mark, 2003. "Descriptive and Prescriptive Analyses of Aid Allocation: Approaches, Issues and Consequences," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  6. 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. [Downloadable!]
  7. 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. [Downloadable!]
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