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Impact of Sectoral Allocation of Foreign Aid on Gender Equity and Human Development

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  • Lynda Pickbourn
  • Léonce Ndikumana
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    Abstract

    While developing countries have made some progress in human development since the turn of the century, many are still lagging behind in important goals such as education, health, nutrition and access to clean drinking water and improved sanitation. Moreover, gender equity remains a major challenge in most countries. In this paper for the United Nations University, Pickbourn and Ndikumana examine the role that foreign aid plays in generating these outcomes, using panel data from OECD-DAC on the sectoral allocation of development aid, in conjunction with country-level data on public expenditures, human development outcomes and other economic, social and political indicators. The paper attempts to assess whether the volume of aid and its sectoral allocation have an impact on human development outcomes and gender equity. We find that the impact of aid on many of the outcomes we study is largely dependent on initial levels of human development and per capita income. The results on the impact of aid vary by type of development outcome. While aid appears to be effective in reducing maternal mortality as well as the gender gap in youth literacy regardless of initial conditions, its effects are at best mixed for other indicators. The paper points to a number of policy issues that deserve further investigation.

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    Paper provided by Political Economy Research Institute, University of Massachusetts at Amherst in its series Published Studies with number unu_pickbourn_ndikumana.

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    Date of creation: 2013
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    Handle: RePEc:uma:perips:unu_pickbourn_ndikumana

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    Keywords: foreign aid; human development; gender equity; education; health;

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    1. Mishra, Prachi & Newhouse, David, 2009. "Does health aid matter?," Journal of Health Economics, Elsevier, vol. 28(4), pages 855-872, July.
    2. Michael Clemens & Steven Radelet & Rikhil Bhavnani, 2004. "Counting Chickens When They Hatch: The Short-term Effect of Aid on Growth," Working Papers 44, Center for Global Development.
    3. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, vol. 64(2), pages 547-570, April.
    4. Boone, Peter, 1996. "Politics and the effectiveness of foreign aid," European Economic Review, Elsevier, vol. 40(2), pages 289-329, February.
    5. Gunseli Berik & Yana van der Meulen Rodgers, 2008. "Engendering Development Strategies and Macroeconomic Policies: What's Sound and Sensible?," Working Paper Series, Department of Economics, University of Utah 2008_02, University of Utah, Department of Economics.
    6. Henrik Hansen & Finn Tarp, 2000. "Aid effectiveness disputed," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(3), pages 375-398.
    7. Adato, Michelle & Hoddinott, John, 2007. "Conditional cash transfer programs: A "magic bullet" for reducing poverty?," 2020 vision briefs BB17 Special Edition, International Food Policy Research Institute (IFPRI).
    8. Janet Gale Stotsky, 2006. "Gender and its Relevance to Macroeconomic Policy: A Survey," IMF Working Papers 06/233, International Monetary Fund.
    9. Stephan Klasen & Francesca Lamanna, 2009. "The Impact of Gender Inequality in Education and Employment on Economic Growth: New Evidence for a Panel of Countries," Feminist Economics, Taylor & Francis Journals, vol. 15(3), pages 91-132.
    10. Agenor, Pierre-Richard & Canuto, Otaviano & da Silva, Luiz Pereira, 2010. "On gender and growth : the role of intergenerational health externalities and women's occupational constraints," Policy Research Working Paper Series 5492, The World Bank.
    11. Kalaitzidakis, Pantelis, et al, 2001. " Measures of Human Capital and Nonlinearities in Economic Growth," Journal of Economic Growth, Springer, vol. 6(3), pages 229-54, September.
    12. Floro, Maria Sagrario, 1995. "Economic restructuring, gender and the allocation of time," World Development, Elsevier, vol. 23(11), pages 1913-1929, November.
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