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Shooting the Messenger of Good News: A Critical Look at the World Bank's Success Story of Effective Aid

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  • Peter Nunnenkamp

Abstract

In a report presented at the UN Conference on Financing for Development in March 2002, the World Bank claims that the effectiveness of its financial aid has improved substantially by targeting aid at poor developing countries pursuing sound economic policies. However, the World Bank's success story rests on an extremely weak foundation: First, the institution's contribution to financial rescue packages for some emerging markets, rather than poverty concerns and policy assessments, dominated the distribution of World Bank financing. Second, the picture portrayed in the report takes a bad turn if only two outliers with extremely high per capita aid (Cape Verde and Honduras) are excluded from the sample. Third, according to our regression results, the allocation of World Bank aid did not improve in the course of the 1990s.

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File URL: http://www.econstor.eu/dspace/bitstream/10419/2751/1/kap1103.pdf
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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1103.

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Length: 23 pages
Date of creation: Apr 2002
Date of revision:
Handle: RePEc:kie:kieliw:1103

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Related research

Keywords: financial aid; World Bank; International Development Association;

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References

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  1. 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, vol. 29(11), pages 1787-1802, November.
  2. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
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Cited by:
  1. Peter Nunnenkamp & Rainer Thiele, 2006. "Targeting Aid to the Needy and Deserving: Nothing But Promises?," The World Economy, Wiley Blackwell, vol. 29(9), pages 1177-1201, 09.
  2. Thiele, Rainer, 2003. "Perspektiven der Entwicklungszusammenarbeit," Open Access Publications from Kiel Institute for the World Economy 2899, Kiel Institute for the World Economy (IfW).
  3. Rolf J. Langhammer, 2002. "Halving Poverty by Doubling Aid: How Well Founded is the Optimism of the World Bank?," Kiel Working Papers 1116, Kiel Institute for the World Economy.

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