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Looking ahead optimally in allocating aid

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  • Adrian Wood (QEH)

Abstract

The Collier-Dollar approach to aid allocation has been less than fully embraced by donors – even those focused on poverty reduction – and has come into conflict with a different approach based on the Millennium Development Goals. These two approaches are shown to be special cases of a more general model of optimal aid allocation, in which donors care about future as well as current poverty. The model is illustratively applied to data for developing regions. Adding a poverty decline adjustment to the allocation formulae now used by aid agencies would make these formulae more efficient and more acceptable.

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File URL: http://www3.qeh.ox.ac.uk/RePEc/qeh/qehwps/qehwps137.pdf
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Paper provided by Queen Elizabeth House, University of Oxford in its series QEH Working Papers with number qehwps137.

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Handle: RePEc:qeh:qehwps:qehwps137

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  1. Collier, Paul & Hoeffler, Anke, 2002. "Aid, policy, and growth in post-conflict societies," Policy Research Working Paper Series 2902, The World Bank.
  2. Carl-Johan Dalgaard & Henrik Hansen & Finn Tarp, 2004. "On The Empirics of Foreign Aid and Growth," Economic Journal, Royal Economic Society, vol. 114(496), pages F191-F216, 06.
  3. Raghuram G. Rajan, 2005. "Aid and Growth: What Does The Cross-Country Evidence Really Show?," Working Papers id:54, eSocialSciences.
  4. Patrick GUILLAUMONT & Lisa CHAUVET, 1999. "Aid and Performance: A Reassessment," Working Papers 199910, CERDI.
  5. Alesina, Alberto & Dollar, David, 2000. " Who Gives Foreign Aid to Whom and Why?," Journal of Economic Growth, Springer, vol. 5(1), pages 33-63, March.
  6. Collier, Paul & Dollar, David, 1999. "Aid allocation and poverty reduction," Policy Research Working Paper Series 2041, The World Bank.
  7. 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.
  8. Denis Cogneau & Jean-David Naudet, 2004. "Who deserves aid? Equality of opportunity,international aid and poverty reduction," Working Papers DT/2004/10, DIAL (Développement, Institutions et Mondialisation).
  9. McGillivray, Mark, 2003. "Aid Effectiveness and Selectivity: Integrating Multiple Objectives into Aid Allocations," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  10. Edward Anderson & Hugh Waddington, 2007. "Aid and the Millennium Development Goal Poverty Target: How Much is Required and How Should it be Allocated?," Oxford Development Studies, Taylor & Francis Journals, vol. 35(1), pages 1-31.
  11. Oecd, 2003. "Aid Effectiveness and Selectivity: Integrating Multiple Objectives into Aid Allocations," OECD Journal on Development, OECD Publishing, vol. 4(3), pages 7-40.
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Cited by:
  1. Lars M. Johansson & Jan Pettersson, 2008. "Tied Aid, Trade-Facilitating Aid or Trade-Diverting Aid?," DEGIT Conference Papers c013_008, DEGIT, Dynamics, Economic Growth, and International Trade.
  2. TEZANOS, Sergio, 2009. "Geopolítica De La Ayuda. ¿Cómo Optimizar El Impacto De La Ayuda Sobre El Crecimiento?," Estudios Economicos de Desarrollo Internacional, Euro-American Association of Economic Development, vol. 9(2), pages 55-88.
  3. Sumner, Andy, 2012. "Where Do The Poor Live?," World Development, Elsevier, vol. 40(5), pages 865-877.
  4. Feeny, Simon & de Silva, Ashton, 2012. "Measuring absorptive capacity constraints to foreign aid," Economic Modelling, Elsevier, vol. 29(3), pages 725-733.
  5. Stijn Claessens & Danny Cassimon, 2007. "Empirical evidence on the new international aid architecture," WEF Working Papers 0026, ESRC World Economy and Finance Research Programme, Birkbeck, University of London.
  6. Temple, Jonathan R.W., 2010. "Aid and Conditionality," Handbook of Development Economics, Elsevier.
  7. Sergio Tezanos Vázquez, 2009. "Geopolítica de la ayuda ¿Cómo optimizar el impacto de la ayuda sobre el crecimiento?," Documentos de trabajo sobre cooperación y desarrollo 200903, Cátedra de Cooperación Internacional y con Iberoamérica (COIBA), Universidad de Cantabria.
  8. Patrick Carter, 2012. "Aid Allocation Rules," Bristol Economics Discussion Papers 12/630, Department of Economics, University of Bristol, UK.
  9. Alan Gelb, 2010. "How Can Donors Create Incentives for Results and Flexibility for Fragile States? A Proposal for IDA," Working Papers id:3233, eSocialSciences.

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