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Who Deserves Aid? Equality of Opportunity, International Aid, and Poverty Reduction

  • Cogneau, Denis
  • Naudet, Jean-David

We build and implement a normative procedure to allocate international aid based on equality of opportunity concerning the risk of poverty. This is an alternative to Collier and Dollar’s proposal (2001) which stresses the impact of aid on worldwide poverty reduction. The big problem with their approach, as regards distributive justice, is that it leaves very great inequality in poverty risk between inhabitants of countries with widely varying structural disadvantages. We draw on post-welfarist theories of social justice, especially those of John Roemer. However our proposal is very different to that of Llavador and Roemer (2001), which has serious methodological errors and reaches contradictory conclusions. Our proposed allocations, like those of Collier and Dollar, differ from current aid allocation by giving more to the poorest countries. Apart from this agreement, our equality of opportunity principle takes account of structural disadvantages to growth rather than quality of past policies. Our kind of allocation shares out poverty risks much more fairly among the world’s population, while reducing global poverty almost as effectively as Collier and Dollar\'s.

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Article provided by Elsevier in its journal World Development.

Volume (Year): 35 (2007)
Issue (Month): 1 (January)
Pages: 104-120

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Handle: RePEc:eee:wdevel:v:35:y:2007:i:1:p:104-120
Contact details of provider: Web page: http://www.elsevier.com/locate/worlddev

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  1. John Roemer & Humberto G. Llavador, 2003. "An Equal-Opportunity Approach to the Allocation of International Air," Working Papers 9910, University of California, Davis, Department of Economics.
  2. Nancy Birdsall & Stijn Claessens & Ishac Diwan, 2003. "Policy Selectivity Forgone: Debt and Donor Behavior in Africa," World Bank Economic Review, World Bank Group, vol. 17(3), pages 409-435, December.
  3. Dollar, David & Levin, Victoria, 2004. "Increasing selectivity of foreign aid, 1984-2002," Policy Research Working Paper Series 3299, The World Bank.
  4. Dirk Van de gaer; & Michel Martinez; & Erik Schokkaert, 1998. "Measuring Intergenerational Mobility and Equality of Opportunity," Economics, Finance and Accounting Department Working Paper Series n780598, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
  5. David Roodman, 2004. "The Anarchy of Numbers: Aid, Development, and Cross-country Empirics," Development and Comp Systems 0412003, EconWPA.
  6. Berthelemy, Jean-Claude & Tichit, Ariane, 2004. "Bilateral donors' aid allocation decisions--a three-dimensional panel analysis," International Review of Economics & Finance, Elsevier, vol. 13(3), pages 253-274.
  7. Van de Gaer, Dirk & Schokkaert, Erik & Martinez, Michel, 2001. "Three Meanings of Intergenerational Mobility," Economica, London School of Economics and Political Science, vol. 68(272), pages 519-37, November.
  8. Thibault Gajdos & Eric Maurin, 2004. "Unequal Uncertainties and Uncertain Inequalities: An Axiomatic Approach," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00085940, HAL.
  9. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, vol. 64(2), pages 547-570, April.
  10. Collier, Paul & Dollar, David, 2001. "Can the World Cut Poverty in Half? How Policy Reform and Effective Aid Can Meet International Development Goals," World Development, Elsevier, vol. 29(11), pages 1787-1802, November.
  11. repec:rus:hseeco:72137 is not listed on IDEAS
  12. 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.
  13. Acemoglu, Daron & Johnson, Simon & Robinson, James A & Thaicharoen, Yunyong, 2002. "Institutional Causes, Macroeconomic Symptoms: Volatility, Crises and Growth," CEPR Discussion Papers 3575, C.E.P.R. Discussion Papers.
  14. Collier, Paul & Dollar, David, 2002. "Aid allocation and poverty reduction," European Economic Review, Elsevier, vol. 46(8), pages 1475-1500, September.
  15. P. Guillaumont & L. Chauvet, 2001. "Aid and Performance: A Reassessment," Journal of Development Studies, Taylor & Francis Journals, vol. 37(6), pages 66-92.
  16. Mark McGillivray, 2003. "Modelling Aid Allocation: Issues, Approaches And Results," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 28(1), pages 171-188, June.
  17. Daniel Kaufmann & Aart Kraay, 2004. "Governance Indicators, Aid Allocation, and the Millennium Challenge Account," Development and Comp Systems 0405013, EconWPA.
  18. 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.
  19. 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 F191-F216, 06.
  20. Alberto Alesina & David Dollar, 1998. "Who Gives Foreign Aid to Whom and Why?," NBER Working Papers 6612, National Bureau of Economic Research, Inc.
  21. Burnside, Craig & Dollar, David, 1997. "Aid, policies, and growth," Policy Research Working Paper Series 1777, The World Bank.
  22. Knack, Stephen, 2000. "Aid dependence and the quality of governance : a cross-country empirical analysis," Policy Research Working Paper Series 2396, The World Bank.
  23. Oecd, 2002. "Aid volume, channels and allocations for poverty reduction," OECD Journal on Development, OECD Publishing, vol. 3(3), pages 33-46.
  24. Collier, Paul & Dehn, Jan, 2001. "Aid, shocks, and growth," Policy Research Working Paper Series 2688, The World Bank.
  25. C-J. Dalgaard & H. Hansen, 2001. "On Aid, Growth and Good Policies," Journal of Development Studies, Taylor & Francis Journals, vol. 37(6), pages 17-41.
  26. Jean-Pierre Cling & Philippe De Vreyer & Mireille Razafindrakoto & François Roubaud, 2003. "La croissance ne suffit pas pour réduire la pauvreté : le rôle des inégalités," Working Papers DT/2003/04, DIAL (Développement, Institutions et Mondialisation).
  27. Daron Acemoglu & Simon Johnson & James A. Robinson, 2002. "Reversal Of Fortune: Geography And Institutions In The Making Of The Modern World Income Distribution," The Quarterly Journal of Economics, MIT Press, vol. 117(4), pages 1231-1294, November.
  28. Roemer, J.E., 1989. "Distributing Health: The Allocationof Resources by an International Agency," Research Paper 71, World Institute for Development Economics Research.
  29. Burnside, Craig & Dollar, David, 2004. "Aid, policies, and growth : revisiting the evidence," Policy Research Working Paper Series 3251, The World Bank.
  30. Jeff Dayton-Johnson & John Hoddinott, 2003. "Aid, policies and growth, redux," Department of Economics at Dalhousie University working papers archive redux2, Dalhousie, Department of Economics.
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