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Can New Aid Modalities Handle Politics?

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Author Info
de Haan, Arjan
Everest-Phillips, Max
Abstract

Are recent donor approaches compatible with a political understanding of policy processes in partner or recipient countries? This question is given increased urgency with the recent calls for and commitment to increasing financial flows, scaling-up of aid, and promoting donor coordination. Do these commitments sharpen the potential dilemma between increased aid and the political processes, and the changes that inevitably accompany this? This paper discusses the nature of the partnership enshrined in the Monterrey consensus, budget support and poverty reduction strategy papers (PRSP) approaches, and assistance directly targeted to the poor, as one way of increasing aid flows to poorest countries. It also discusses approaches to the role of aid in economic growth, and argues for better understanding of the politics of growth. The papers questions whether the current ?institutions? or governance paradigm brings sufficient political context to aid delivery, and discusses the relationship between domestic revenue generation and foreign aid. A concluding section draws out implications for aid delivery, and for a potential role of socio-political analysis in new aid modalities.

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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Papers with number UNU-WIDER Research Paper RP2007/63.

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Length: 24 pages
Date of creation: 2007
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Handle: RePEc:unu:wpaper:rp2007-63

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Keywords: aid; donors; governance;

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  1. Christopher Adam & David Bevan, 2004. "Aid and the Supply Side: Public Investment, Export Performance and Dutch Disease in Low Income Countries," Economics Series Working Papers 201, University of Oxford, Department of Economics. [Downloadable!]
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  2. Epstein, Gerald A., 2006. "Central Banks as Agents of Economic Development," Working Papers RP2006/54, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  3. Ravallion, Martin, 2003. "Targeted transfers in poor countries : revisiting the tradeoffs and policy options," Policy Research Working Paper Series 3048, The World Bank. [Downloadable!]
  4. Thomas Baunsgaard & Michael Keen, 2005. "Tax Revenue and (or?) Trade Liberalization," IMF Working Papers 05/112, International Monetary Fund. [Downloadable!]
  5. Daniel Kaufmann, 2003. "Rethinking Governance: Empirical Lessons Challenge Orthodoxy," Macroeconomics 0308007, EconWPA. [Downloadable!]
  6. Di John, Jonathan, 2006. "The Political Economy of Taxation and Tax Reform in Developing Countries," Working Papers RP2006/74, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  7. William Easterly & Jozef Ritzan & Michael Woolcock, 2006. "Social Cohesion, Institutions, and Growth," Working Papers 94, Center for Global Development. [Downloadable!]
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  8. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December. [Downloadable!] (restricted)
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  9. Alesina, Alberto & Rodrik, Dani, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 109(2), pages 465-90, May. [Downloadable!] (restricted)
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  10. Azam, Jean-Paul & Devarajan, Shantayanan & O'Connell, Stephen A., 1999. "Aid dependence reconsidered," Policy Research Working Paper Series 2144, The World Bank. [Downloadable!]
  11. Andrew S. Natsios, 2006. "Five Debates on International Development: The US Perspective," Development Policy Review, Overseas Development Institute, vol. 24(2), pages 131-139, 03. [Downloadable!] (restricted)
  12. Nauros F. Campos & Jeffrey B. Nugent, 2000. "Investment and Instability," William Davidson Institute Working Papers Series 337, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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  13. Craig, David & Porter, Doug, 2003. "Poverty Reduction Strategy Papers: A New Convergence," World Development, Elsevier, vol. 31(1), pages 53-69, January. [Downloadable!] (restricted)
  14. Gupta, Sanjeev & Clements, Benedict & Baldacci, Emanuele & Mulas-Granados, Carlos, 2005. "Fiscal policy, expenditure composition, and growth in low-income countries," Journal of International Money and Finance, Elsevier, vol. 24(3), pages 441-463, April. [Downloadable!] (restricted)
  15. 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. [Downloadable!] (restricted)
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  16. Keefer, Philip, 2004. "A review of the political economy of governance : from property rights to voice," Policy Research Working Paper Series 3315, The World Bank. [Downloadable!]
  17. Azam, J.P. & Devarajan, S. & O'Connell, S.A., 1999. "Aid Dependence Reconsidered," Working Papers Series 99-5, Centre for the Study of African Economies, University of Oxford.
  18. Author-Name: Jeffrey D. Sachs & John W. McArthur & Guido Schmidt-Traub & Margaret Kruk & Chandrika Bahadur & Michael Faye & Gordon McCord, 2004. "Ending Africa's Poverty Trap," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 35(2004-1), pages 117-240. [Downloadable!]
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