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Development effectiveness: what have we learnt?

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  • Paul Collier
  • David Dollar

Abstract

We suggest that the 'poverty-efficiency' aid allocation is merely a benchmark guide if a donor lacks other information about the country and also the power to change or prevail over government preferences. We argue that in most circumstances donors have only limited scope for the latter and that, while high aid dependence may reduce the fungibility problem and the use of NGOs can by-pass it altogether, such circumstances are not very common. Hence, the main reasons for departing from the benchmark are when the donor has additional information about likely poverty impact, or if poverty reduction is not the objective. Copyright 2004 Royal Economic Society.

Suggested Citation

  • Paul Collier & David Dollar, 2004. "Development effectiveness: what have we learnt?," Economic Journal, Royal Economic Society, vol. 114(496), pages 244-271, June.
  • Handle: RePEc:ecj:econjl:v:114:y:2004:i:496:p:f244-f271
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