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An equal-opportunity approach to the allocation of international aid

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  • Llavador, Humberto G.
  • Roemer, John E.

Abstract

How should international aid be distributed? The most common view is according to some utilitarian formula: in order to maximize the average growth rate of aid recipients or the growth rate of income of the class of recipient countries. Recently, the World Bank [7] has published a study demonstrating the importance of good economic management, within a recipient country, in transforming aid into economic growth. We identify good economic management with e ort, and ask, how should aid be distributed to equalize opportunities [among recipient countries] for achieving growth, according to Roemer''s [5] theory of equal opportunity. In addition, we calculate how aid should be distributed according to a utilitarian view. Both the equal-opportunity and utilitarian recommendations are less compensatory than actual aid policy (they would give less to many African countries than present policy does). We discuss the results.
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Suggested Citation

  • Llavador, Humberto G. & Roemer, John E., 2001. "An equal-opportunity approach to the allocation of international aid," Journal of Development Economics, Elsevier, vol. 64(1), pages 147-171, February.
  • Handle: RePEc:eee:deveco:v:64:y:2001:i:1:p:147-171
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    References listed on IDEAS

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    1. Charles C. Chang & Eduardo Fernández-Arias & Luis Serven, 1998. "Measuring Aid Flows: A New Approach," Research Department Publications 4146, Inter-American Development Bank, Research Department.
    2. Collier, Paul & Dollar, David, 2002. "Aid allocation and poverty reduction," European Economic Review, Elsevier, vol. 46(8), pages 1475-1500, September.
    3. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
    4. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
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    Cited by:

    1. Patrick GUILLAUMONT, 2008. "Adapting Aid Allocation Criteria to Development Goals," Working Papers P01, FERDI.
    2. Lidia Ceriani & Paolo Verme, 2014. "The Income Lever and the Allocation of Aid," Journal of Development Studies, Taylor & Francis Journals, vol. 50(11), pages 1510-1522, November.
    3. Tarp, Finn, 2003. "Udviklingsbistanden i perspektiv
      [Foreign Aid in Perspective]
      ," MPRA Paper 64172, University Library of Munich, Germany.
    4. Sergio Tezanos Vázquez & Humberto Llavador, 2010. "Mapas de ayuda para América Latina y el Caribe," Documentos de trabajo sobre cooperación y desarrollo 201002, Cátedra de Cooperación Internacional y con Iberoamérica (COIBA), Universidad de Cantabria.
    5. Cogneau, Denis & Naudet, Jean-David, 2007. "Who Deserves Aid? Equality of Opportunity, International Aid, and Poverty Reduction," World Development, Elsevier, vol. 35(1), pages 104-120, January.
    6. Patrick GUILLAUMONT & Phu NGUYEN-VAN & Thi Kim Cuong PHAM & Laurent WAGNER, 2015. "Efficient and fair allocation of aid," Working Papers 3937, FERDI.
    7. Dirk-Jan Koch & Ruerd Ruben, 2008. "Spatial Clustering Of NGOs: An Evolutionary Economic Geography Approach," Papers in Evolutionary Economic Geography (PEEG) 0814, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2008.
    8. Erwin Ooghe & Erik Schokkaert & Dirk gaer, 2007. "Equality of Opportunity versus Equality of Opportunity Sets," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 28(2), pages 209-230, February.
    9. Feeny, Simon & de Silva, Ashton, 2012. "Measuring absorptive capacity constraints to foreign aid," Economic Modelling, Elsevier, vol. 29(3), pages 725-733.
    10. Julia Cage, 2015. "Measuring Policy Performance: Can We Do Better than the World Bank?," Sciences Po publications info:hdl:2441/5su81hd0ma8, Sciences Po.
    11. McGillivray, Mark, 2004. "Descriptive and prescriptive analyses of aid allocation: Approaches, issues, and consequences," International Review of Economics & Finance, Elsevier, vol. 13(3), pages 275-292.
    12. Denis Cogneau, 2005. "Equality of opportunity and other equity principles in the context of developing countries," Working Papers DT/2005/01, DIAL (Développement, Institutions et Mondialisation).
    13. Robert Oxoby, 2009. "Understanding social inclusion, social cohesion, and social capital," International Journal of Social Economics, Emerald Group Publishing, vol. 36(12), pages 1133-1152, October.
    14. Lisa Chauvet & Denis Cogneau & Jean-David Naudet, 2008. "Sélectivité et égalité des chances dans l'allocation de l'aide internationale. Une analyse de la dernière décennie," Economie & Prévision, La Documentation Française, vol. 0(5), pages 23-38.
    15. Jacky Amprou & Patrick Guillaumont & Sylviane Guillaumont Jeanneney, 2007. "Aid Selectivity According to Augmented Criteria," The World Economy, Wiley Blackwell, vol. 30(5), pages 733-763, May.
    16. Bourguignon, François & Platteau, Jean-Philippe, 2017. "Does Aid Availability Affect Effectiveness in Reducing Poverty? A Review Article," World Development, Elsevier, vol. 90(C), pages 6-16.
    17. Ronald Kumar, 2014. "Exploring the nexus between capital inflows and growth in Latin America and the Caribbean: a study of clusters led by Brazil and Mexico," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(5), pages 2537-2552, September.
    18. Mark McGillivray, 2003. "Efficacité de l'aide et sélectivité : vers un concept élargi," Revue d’économie du développement, De Boeck Université, vol. 11(4), pages 43-62.
    19. Anna Christina D'Addio, 2007. "Intergenerational Transmission of Disadvantage: Mobility or Immobility Across Generations?," OECD Social, Employment and Migration Working Papers 52, OECD Publishing.
    20. 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.
    21. Wane, Waly, 2004. "The quality of foreign aid : country selectivity or donors incentives?," Policy Research Working Paper Series 3325, The World Bank.
    22. repec:dau:papers:123456789/4461 is not listed on IDEAS
    23. repec:dau:papers:123456789/4404 is not listed on IDEAS
    24. Sobhee, Sanjeev K. & Nath, Shyam, 2007. "Growth, Income Inequality and Aid Giving: Looking for an Aid-Kuznets Curve," Review of Applied Economics, Review of Applied Economics, vol. 3(1-2).

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