Another Look at Foreign Aid
AbstractThe discussion of the effectiveness of foreign aid has reached a high pitch. This paper assesses the sorry past and present key arguments for a potentially more effective and sustainable method of aid delivery. A key ingredient is to shake off the vestiges of structural adjustment and move towards true recipient country ownership complete with “self-conditionality” with aid recipients formulating their own reform packages. This means donors become much more passive, act like a bank and respond to proposals which concentrate on a few critical areas over a three to five-year period. Policy-based program lending should respond to packages put together by the main domestic stakeholders with the help, if necessary, of independent third parties. There should be no compulsion to lend; indeed, an aid hiatus is an indication that the new system is effective. What is required is for donors to stop using aid as a short-term foreign policy tool and for recipients to accept the notion that aid provides the opportunity to reduce the inevitable adjustment pains caused by real reforms.
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Bibliographic InfoPaper provided by Economic Growth Center, Yale University in its series Working Papers with number 1015.
Length: 25 pages
Date of creation: Aug 2012
Date of revision:
foreign aid; self-conditionality; program lending; new donors;
Find related papers by JEL classification:
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O20 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - General
- O38 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Government Policy
- P45 - Economic Systems - - Other Economic Systems - - - International Linkages
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-30 (All new papers)
- NEP-DEV-2012-09-30 (Development)
- NEP-PKE-2012-09-30 (Post Keynesian Economics)
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.:
- David B. Skarbek and Peter T. Leeson, 2009. "What Can Aid Do?," Cato Journal, Cato Journal, Cato Institute, vol. 29(3), pages 391-397, Fall.
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