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Helping Hand ? Aid to Failing States

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Author Info

  • Lisa Chauvet

    ()
    (DIAL, IRD, Paris)

  • Paul Collier

    ()
    (CSAE, Oxford)

Abstract

We define ‘failing states’ are those low-income states in which policy and governance is persistently very bad. We develop a theory of reform in these states in which several characteristics of the society might potentially be the binding constraint on change. We then introduce aid, disaggregated into technical assistance and finance, showing how it might affect these constraints. We then test our theory of aid and reform on global data. We estimate hazard functions to establish what enhances the prospects of sustained reform. We find that a proxy for the relaxation of the binding constraints postulated in the theory is highly significant. There is some evidence that both technical capacity in the society and elite interests are particularly important. Early aid has substantial but offsetting effects: technical assistance consolidates incipient reform whereas finance chills it.________________________________ Les Etats fragiles auxquels nous nous intéressons sont les pays à faible revenu caractérisés par la faiblesse de leurs institutions et de leurs politiques économiques. Le statut d’Etat fragile est très persistant. Nous développons une théorie des réformes, adaptée à ce contexte, dans laquelle plusieurs caractéristiques de la société peuvent potentiellement contraindre les réformes. Nous identifions la manière dont l’aide peut influencer ces différentes contraintes en distinguant l’assistance technique du reste de l’aide. Nous proposons ensuite des tests économétriques de manière à identifier les principales contraintes aux réformes dans les Etats fragiles, et le rôle de l’aide. Ces tests suggèrent que les contraintes de capacité institutionnelle et de préférences de l’élite au pouvoir sont particulièrement importantes dans les Etats fragiles. De plus, en début de réforme, l’assistance technique renforce le processus de réforme tandis que l’aide financière le fragilise.

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Bibliographic Info

Paper provided by DIAL (Développement, Institutions et Mondialisation) in its series Working Papers with number DT/2006/14.

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Length: 24 pages
Date of creation: Nov 2006
Date of revision:
Handle: RePEc:dia:wpaper:dt200614

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Related research

Keywords: Fragile States; reforms; foreign aid; technical assistance; hazard model; Etats fragiles; réformes; aide publique au développement; assistance technique; modèle de durée;

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Cited by:
  1. Besley, Timothy J. & Persson, Torsten, 2011. "Fragile States and Development Policy," CEPR Discussion Papers 8285, C.E.P.R. Discussion Papers.
  2. Paul Collier, 2006. "Africa : geography and growth," TEN, Federal Reserve Bank of Kansas City, issue Fall, pages 18-21.

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