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Aid allocation to fragile states: Absorptive capacity constraints

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  • Simon Feeny

    (School of Economics, Finance and Marketing, RMIT University, Melbourne, Australia)

  • Mark McGillivray

    (World Institute for Development Economics Research, United Nations University, Helsinki, Finland)

Abstract

The international donor community has grave concerns about the effectiveness of aid to countries it classifies as 'fragile states'. The impact of aid on growth and poverty reduction and the ability to efficiently absorb additional inflows is thought to be significantly lower in these countries compared to other recipients. This paper examines this issue and suggests that a while a number of fragile states can efficiently absorb more aid than they have received, a number receive far more aid than they can efficiently absorb from a perspective based purely on per capita income growth. Policy recommendations are provided. Copyright © 2008 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): 21 (2009)
Issue (Month): 5 ()
Pages: 618-632

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Handle: RePEc:wly:jintdv:v:21:y:2009:i:5:p:618-632

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

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  1. Tony Addison & George Mavrotas & Mark McGillivray, 2005. "Development assistance and development finance: evidence and global policy agendas," Journal of International Development, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 17(6), pages 819-836.
  2. Lensink, Robert & White, Howard, 1999. "Are there negative returns to aid?," Research Report, University of Groningen, Research Institute SOM (Systems, Organisations and Management) 99E60, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
  3. Michael Clemens & Steven Radelet & Rikhil Bhavnani, 2004. "Counting Chickens When They Hatch: The Short-term Effect of Aid on Growth," Working Papers, Center for Global Development 44, Center for Global Development.
  4. Henrik Hansen & Finn Tarp, 2000. "Aid effectiveness disputed," Journal of International Development, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 12(3), pages 375-398.
  5. Collier, Paul & Dollar, David, 2001. "Can the World Cut Poverty in Half? How Policy Reform and Effective Aid Can Meet International Development Goals," World Development, Elsevier, Elsevier, vol. 29(11), pages 1787-1802, November.
  6. C-J. Dalgaard & H. Hansen, 2001. "On Aid, Growth and Good Policies," Journal of Development Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 37(6), pages 17-41.
  7. McGillivray, Mark & Feeny, Simon, 2008. "Aid and Growth in Fragile States," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) RP2008/03, World Institute for Development Economic Research (UNU-WIDER).
  8. Branchflower, Andrew & Hennell, Sarah & Pongracz, Sophie & Smart, Malcolm, 2004. "How Important Are Difficult Environments To Achieving The Mdgs?," PRDE Working Papers, Department for International Development (DFID) (UK) 12821, Department for International Development (DFID) (UK).
  9. John Hudson & Paul Mosley, 2001. "Aid policies and growth: in search of the holy grail," Journal of International Development, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 13(7), pages 1023-1038.
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Cited by:
  1. Clarke, Matthew, 2011. "Innovative Delivery Mechanisms for Increased Aid Budgets," Working Paper Series, World Institute for Development Economic Research (UNU-WIDER) UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  2. Kenneth Harttgen & Stephan Klasen, 2010. "Fragility and MDG Progress: How useful is the Fragility Concept?," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 41, Courant Research Centre PEG.
  3. Jones, Yakama Manty, 2013. "Testing the foreign aid-led growth hypothesis in West Africa," MPRA Paper 50361, University Library of Munich, Germany.
  4. Ismail O. FASANYA & Adegbemi B.O ONAKOYA, 2012. "Does Foreign Aid Accelerate Economic Growth? An Empirical Analysis for Nigeria," International Journal of Economics and Financial Issues, Econjournals, vol. 2(4), pages 423-431.

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