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Conditionality and Aid Effectiveness Re‐evaluated

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  • Oliver Morrissey

Abstract

This paper evaluates aid by considering how effective aid has been in exerting leverage on policy choices. It is rather easy to demonstrate that if a country is unwilling to implement policy reforms, attaching conditions to aid will not ensure sustained reform. In this sense conditionality does not work. This ignores the fact that donors, through aid and conditions, can influence recipient policies. The argument of this paper is that if the analysis focuses on channels of influence, one can better identify ways to enhance aid effectiveness. Reform is a slow and difficult process and donors would be more effective ‘development partners’ if they see their role as being to support rather than force this process. In simple terms, donors should provide the information and technical assistance to help governments to make policy choices, rather than dictating choices by imposing conditions.

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  • Oliver Morrissey, 2004. "Conditionality and Aid Effectiveness Re‐evaluated," The World Economy, Wiley Blackwell, vol. 27(2), pages 153-171, February.
    • Handle: RePEc:bla:worlde:v:27:y:2004:i:2:p:153-171
    DOI: 10.1111/j.1467-9701.2004.00594.x
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    References listed on IDEAS

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    1. Robert Lensink & Oliver Morrissey, 2000. "Aid instability as a measure of uncertainty and the positive impact of aid on growth," Journal of Development Studies, Taylor & Francis Journals, vol. 36(3), pages 31-49.
    2. Lensink, Robert & Morrissey, Oliver, 2002. "The volatility of FDI, not the level, affects growth in developing countries," CDS Research Reports 200213, University of Groningen, Centre for Development Studies (CDS).
    3. Noorbakhsh, Farhad & Paloni, Alberto, 2001. "Structural Adjustment and Growth in Sub-Saharan Africa: The Importance of Complying with Conditionality," Economic Development and Cultural Change, University of Chicago Press, vol. 49(3), pages 479-509, April.
    4. Dreher, Axel, 2002. "The development and implementation of IMF and World Bank conditionality," HWWA Discussion Papers 165, Hamburg Institute of International Economics (HWWA).
    5. 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 191-216, June.
    6. Richard M. Auty & Oliver Morrissey, 1995. "Politics and economic policy reform: Trade liberalization in sub‐Saharan Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 7(4), pages 599-618, July.
    7. repec:dgr:rugcds:200213 is not listed on IDEAS
    8. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, vol. 64(2), pages 547-570, April.
    9. Hausken, Kjell & Plümper, Thomas & Schneider, Gerald, 2002. "The Trilemma of the Protectionist Autocrat: An Assessment of the Political Determinants of Foreign Economic Liberalization," MPRA Paper 75866, University Library of Munich, Germany.
    10. Keith Griffin, 2000. "Studies in Development Strategy and Systemic Transformation," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-51041-8, December.
    11. Howard White & Oliver Morrissey, 1997. "Conditionality When Donor And Recipient Preferences Vary," Journal of International Development, John Wiley & Sons, Ltd., vol. 9(4), pages 497-505.
    12. Syed Mansoob Murshed & Kunibert Raffer (ed.), 1994. "Trade, Transfers And Development," Books, Edward Elgar Publishing, number 329.
    13. repec:bla:kyklos:v:46:y:1993:i:2:p:241-61 is not listed on IDEAS
    14. Dean, J.M. & Desai, S. & Riedel, J., 1994. "Trade Policy Reform in Developing Countries since 1985," World Bank - Discussion Papers 267, World Bank.
    15. Jennifer Mbabazi & Oliver Morrissey & Chris Milner, 2001. "Are Inequality and Trade Liberalization Influences on Growth and Poverty?," WIDER Working Paper Series DP2001-132, World Institute for Development Economic Research (UNU-WIDER).
    16. David Greenaway & Oliver Morrissey, 1993. "Structural Adjustment and Liberalisation in Developing Countries: What Lessons Have We Learned?," Kyklos, Wiley Blackwell, vol. 46(2), pages 241-261, May.
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    Cited by:

    1. Łukasz Marć, 2017. "The Impact of Aid on Total Government Expenditures: New Evidence on Fungibility," Review of Development Economics, Wiley Blackwell, vol. 21(3), pages 627-663, August.
    2. Dhahri, Sabrine & Omri, Anis, 2020. "Foreign capital towards SDGs 1 & 2—Ending Poverty and hunger: The role of agricultural production," Structural Change and Economic Dynamics, Elsevier, vol. 53(C), pages 208-221.
    3. Sushanta Mallick & Tomoe Moore, 2008. "Foreign Capital in a Growth Model," Review of Development Economics, Wiley Blackwell, vol. 12(1), pages 143-159, February.
    4. Karuna Gomanee & Sourafel Girma & Oliver Morrissey, 2005. "Aid and growth in Sub-Saharan Africa: accounting for transmission mechanisms," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(8), pages 1055-1075.
    5. Łukasz Marć, 2017. "The Impact of Aid on Total Government Expenditures: New Evidence on Fungibility," Review of Development Economics, Wiley Blackwell, vol. 21(3), pages 627-663, August.
    6. Jones, Chris & Morrissey, Oliver & Nelson, Doug, 2011. "Did the World Bank Drive Tariff Reforms in Eastern Africa?," World Development, Elsevier, vol. 39(3), pages 324-335, March.
    7. Lukasz Marc, 2012. "New Evidence on Fungibility at the Aggregate Level," Tinbergen Institute Discussion Papers 12-083/2, Tinbergen Institute.
    8. Raul Barreto, 2006. "Foreign Aid: What Good Is It?," EcoMod2006 272100008, EcoMod.
    9. Bag, Parimal Kanti & Roy Chowdhury, Prabal, 2016. "Gradualism in aid and reforms," Journal of International Economics, Elsevier, vol. 103(C), pages 108-123.

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