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Does the World Bank have a micro-macro paradox or do the data deceive?

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Author Info

  • Stephen Howes

    ()
    (Development Policy Centre, Crawford School of Economics and Government, The Australian National University)

  • Sabit Otor

    (Development Policy Centre, Crawford School of Economics and Government, The Australian National University)

  • Cate Rogers

    (Development Policy Centre, Crawford School of Economics and Government, The Australian National University)

Abstract

In 1986, Mosely first drew attention to an apparent paradox in the performance of international aid. Microeconomic data from evaluations of aid financed projects showed a majority of projects were successful, whereas macroeconomic data from regressions of aid on growth were discouraging. The paradox, if real, implied that the aggregate impact of aid was less the sum of its parts. Mosely asked whether the paradox was real of whether the “data deceived.” This question, which has come to be equated with the issue of whether aid works, has been the subject of numerous cross-country regressions to test whether aid has an impact on growth (or related variables). But the regression results have been inconclusive, and the methodology has come under attack. Evidence from case studies offers an alternative test. One prominent case study approach is that of Picciotto (2009), which claims to find strong evidence for the existence of the paradox, namely the fact that one third of World Bank country assistance program evaluations show success at the project (micro) level but not at the country (macro) level. This paper re-evaluates Piciotto’s claimed findings.

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Bibliographic Info

Paper provided by Development Policy Centre, Crawford School of Public Policy, The Australian National University in its series Development Policy Centre Discussion Papers with number 1105.

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Date of creation: Jun 2011
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Handle: RePEc:een:devpol:1105

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Keywords: aid; aid effectiveness; world bank;

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Cited by:
  1. Andrew McNee, 2012. "Rethinking Health Sector Wide Approaches through the lens of Aid Effectiveness," Development Policy Centre Discussion Papers 1214, Development Policy Centre, Crawford School of Public Policy, The Australian National University.

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