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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.

Suggested Citation

  • Simon Feeny & Mark McGillivray, 2009. "Aid allocation to fragile states: Absorptive capacity constraints," Journal of International Development, John Wiley & Sons, Ltd., vol. 21(5), pages 618-632.
    • Handle: RePEc:wly:jintdv:v:21:y:2009:i:5:p:618-632
    DOI: 10.1002/jid.1502
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    References listed on IDEAS

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    6. 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., vol. 17(6), pages 819-836.
    7. Michael A. Clemens & Steven Radelet & Rikhil Bhavnani, 2004. "Counting chickens when they hatch: The short-term effect of aid on growth," International Finance 0407010, University Library of Munich, Germany.
    8. Branchflower, Andrew & Hennell, Sarah & Pongracz, Sophie & Smart, Malcolm, 2004. "How Important Are Difficult Environments To Achieving The Mdgs?," PRDE Working Papers 12821, Department for International Development (DFID) (UK).
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    Cited by:

    1. Jones, Yakama Manty, 2013. "Testing the foreign aid-led growth hypothesis in West Africa," MPRA Paper 50361, University Library of Munich, Germany.
    2. Clarke, Matthew, 2011. "Innovative Delivery Mechanisms for Increased Aid Budgets," WIDER Working Paper Series 073, World Institute for Development Economic Research (UNU-WIDER).
    3. Ben Katoka & Huck‐ju Kwon, 2021. "A Paradox of New Deal and Foreign Aid for Fragile States in Sub‐Saharan Africa," Global Policy, London School of Economics and Political Science, vol. 12(5), pages 639-652, November.
    4. Williams, Christopher, 2021. "Global human burden and official development assistance in health R&D: The role of medical absorptive capacity," Research Policy, Elsevier, vol. 50(10).
    5. Sonja Grimm & Okka Lou Mathis, 2018. "Democratization via aid? The European Union’s democracy promotion in the Western Balkans 1994–2010," European Union Politics, , vol. 19(1), pages 163-184, March.
    6. 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.
    7. Simone Bertoli & Elisa Ticci, 2012. "A Fragile Guideline to Development Assistance," Development Policy Review, Overseas Development Institute, vol. 30(2), pages 211-230, March.
    8. Francesca G. Caselli & Andrea F. Presbitero, 2020. "Aid Effectiveness in Fragile States," Mo.Fi.R. Working Papers 158, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    9. Matthew Clarke, 2011. "Innovative Delivery Mechanisms for Increased Aid Budgets: Lessons from a New Australian Aid Partnership," WIDER Working Paper Series wp-2011-073, World Institute for Development Economic Research (UNU-WIDER).
    10. Gnangnon, Sèna Kimm, 2023. "The Quality of Aid for Trade Flows and Economic Complexity," EconStor Preprints 271538, ZBW - Leibniz Information Centre for Economics.
    11. 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.
    12. Anjum Fayyaz & Peter Lund-Thomsen & Adam Lindgreen, 2017. "Industrial Clusters and CSR in Developing Countries: The Role of International Donor Funding," Journal of Business Ethics, Springer, vol. 146(3), pages 619-637, December.
    13. Adekunle, Wasiu & Sulaimon, Mubaraq, 2018. "A Re-examination of the Relationship between Foreign Capital Flows and Economic Growth in Nigeria," MPRA Paper 87754, University Library of Munich, Germany.
    14. Tiamiyu, Kehinde A., 2019. "Foreign aid and economic growth: Does non-linearity matter?," MPRA Paper 108588, University Library of Munich, Germany, revised Jul 2109.

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