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Aid allocation, poverty reduction and the Assessing Aid report

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  • Robert Lensink
  • Howard White

Abstract

Assessing Aid argues that aid should be reallocated in favour of poor countries with good policies. This argument is based on a model in which poverty depends on growth, and growth on aid, the impact of aid being higher in countries with good policies. So‐called ‘poverty‐efficient’ aid allocations are thus calculated, which are shown to be at odds with those of bilateral donors. There are a number of theoretical and empirical shortcomings in this work. First, aid can affect poverty through channels other than growth. Second, what constitutes ‘good policies’ is debatable. Third, the empirical estimates are very sensitive to changes in model specification and sample. This paper critically reviews these three issues and finds the poverty‐oriented aid reallocations implied in Assessing Aid to be an unreliable guide to policy. Copyright © 2000 John Wiley & Sons, Ltd.

Suggested Citation

  • Robert Lensink & Howard White, 2000. "Aid allocation, poverty reduction and the Assessing Aid report," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(3), pages 399-412, April.
  • Handle: RePEc:wly:jintdv:v:12:y:2000:i:3:p:399-412
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    File URL: https://doi.org/10.1002/(SICI)1099-1328(200004)12%3A3%3C399%3A%3AAID-JID658%3E3.0.CO%3B2-5
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    References listed on IDEAS

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    1. Alejandro Ramirez & Gustav Ranis, 1997. "Economic Growth and Human Development," Working Papers 787, Economic Growth Center, Yale University.
    2. Robert Lensink & Howard White, 2000. "Assessing Aid: A Manifesto for Aid in the 21st Century?," Oxford Development Studies, Taylor & Francis Journals, vol. 28(1), pages 5-18.
    3. Cline, William R. & Sargen, Nicholas P., 1975. "Performance criteria and multilateral aid allocation," World Development, Elsevier, vol. 3(6), pages 383-391, June.
    4. Ranis, Gustav & Stewart, Frances & Ramirez, Alejandro, 2000. "Economic Growth and Human Development," World Development, Elsevier, vol. 28(2), pages 197-219, February.
    5. Henrik Hansen & Finn Tarp, 2000. "Aid effectiveness disputed," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(3), pages 375-398, April.
    6. Howard White, 1999. "Global poverty reduction: are we heading in the right direction?," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(4), pages 503-519.
    7. Lucia Hanmer & Robert Lensink & Howard White, 2003. "Infant and child mortality in developing countries: Analysing the data for Robust determinants," Journal of Development Studies, Taylor & Francis Journals, vol. 40(1), pages 101-118.
    8. Filmer, Deon & Pritchett, Lant, 1997. "Child mortality and public spending on health : how much does money matter?," Policy Research Working Paper Series 1864, The World Bank.
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    Citations

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    Cited by:

    1. Baulch, Bob, 2006. "Aid distribution and the MDGs," World Development, Elsevier, vol. 34(6), pages 933-950, June.
    2. Dehn, Jan, 2000. "The effects on growth of commodity price uncertainty and shocks," Policy Research Working Paper Series 2455, The World Bank.
    3. Sergio Tezanos Vázquez, 2010. "Ayuda y crecimiento: una relación en disputa," Documentos de trabajo sobre cooperación y desarrollo 201001, Cátedra de Cooperación Internacional y con Iberoamérica (COIBA), Universidad de Cantabria.
    4. Sergio Tezanos Vázquez, 2009. "Geopolítica de la ayuda ¿Cómo optimizar el impacto de la ayuda sobre el crecimiento?," Documentos de trabajo sobre cooperación y desarrollo 200903, Cátedra de Cooperación Internacional y con Iberoamérica (COIBA), Universidad de Cantabria.
    5. 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.
    6. Jan Dehn, 2000. "Commodity Price Uncertainty and Shocks: Implications for Economic Growth," Economics Series Working Papers WPS/2000-10, University of Oxford, Department of Economics.
    7. Boriana Yontcheva & Nadia Masud, 2005. "Does Foreign Aid Reduce Poverty? Empirical Evidence from Nongovernmental and Bilateral Aid," IMF Working Papers 05/100, International Monetary Fund.
    8. 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.
    9. Thilak Ranaweera, 2004. "Ghost of the financing gap: an overlooked aspect of the aid debate," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(4), pages 637-652.
    10. Armah, Stephen E. & Nelson, Carl H., 2008. "Is Foreign Aid Beneficial for Sub-Saharan Africa? A Panel Data Analysis," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6356, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Santosh Mehrotra, 2001. "The Rhetoric of International Development Targets and the Reality of Official Development Assistance," Papers inwopa01/14, Innocenti Working Papers.
    12. 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.
    13. Askarov, Zohid & Doucouliagos, Hristos, 2015. "Development Aid and Growth in Transition Countries," World Development, Elsevier, vol. 66(C), pages 383-399.
    14. Howard White, 2001. "Will the new aid agenda help promote poverty reduction?," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(7), pages 1057-1070.

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