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Aid allocation to fragile states: Absorptive capacity constraints

Author

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  • Simon Feeny

    (School of Economics, Finance and Marketing, RMIT University, Melbourne, Australia)

  • Mark McGillivray

    (World Institute for Development Economics Research, United Nations University, Helsinki, Finland)

Abstract

The international donor community has grave concerns about the effectiveness of aid to countries it classifies as 'fragile states'. The impact of aid on growth and poverty reduction and the ability to efficiently absorb additional inflows is thought to be significantly lower in these countries compared to other recipients. This paper examines this issue and suggests that a while a number of fragile states can efficiently absorb more aid than they have received, a number receive far more aid than they can efficiently absorb from a perspective based purely on per capita income growth. Policy recommendations are provided. Copyright © 2008 John Wiley & Sons, Ltd.

Suggested Citation

  • Simon Feeny & Mark McGillivray, 2009. "Aid allocation to fragile states: Absorptive capacity constraints," Journal of International Development, John Wiley & Sons, Ltd., vol. 21(5), pages 618-632.
  • Handle: RePEc:wly:jintdv:v:21:y:2009:i:5:p:618-632
    DOI: 10.1002/jid.1502
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    References listed on IDEAS

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    1. 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.
    2. John Hudson & Paul Mosley, 2001. "Aid policies and growth: in search of the holy grail," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(7), pages 1023-1038.
    3. R. Lensink & H. White, 2001. "Are There Negative Returns to Aid?," Journal of Development Studies, Taylor & Francis Journals, vol. 37(6), pages 42-65.
    4. 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.
    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. Tomi Ovaska, 2003. "The Failure of Development Aid," Cato Journal, Cato Journal, Cato Institute, vol. 23(2), pages 175-188, Fall.
    7. Tony Addison & George Mavrotas & Mark McGillivray, 2005. "Development assistance and development finance: evidence and global policy agendas," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(6), pages 819-836.
    8. Michael A. Clemens & Steven Radelet & Rikhil Bhavnani, 2004. "Counting chickens when they hatch: The short-term effect of aid on growth," International Finance 0407010, EconWPA.
    9. Branchflower, Andrew & Hennell, Sarah & Pongracz, Sophie & Smart, Malcolm, 2004. "How Important Are Difficult Environments To Achieving The Mdgs?," PRDE Working Papers 12821, Department for International Development (DFID) (UK).
    10. McGillivray, Mark & Feeny, Simon, 2008. "Aid and Growth in Fragile States," WIDER Working Paper Series 003, World Institute for Development Economic Research (UNU-WIDER).
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    Cited by:

    1. Jones, Yakama Manty, 2013. "Testing the foreign aid-led growth hypothesis in West Africa," MPRA Paper 50361, University Library of Munich, Germany.
    2. Clarke, Matthew, 2011. "Innovative Delivery Mechanisms for Increased Aid Budgets," WIDER Working Paper Series 073, World Institute for Development Economic Research (UNU-WIDER).
    3. Kenneth Harttgen & Stephan Klasen, 2010. "Fragility and MDG Progress: How useful is the Fragility Concept?," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 41, Courant Research Centre PEG.
    4. Ismail O. FASANYA & Adegbemi B.O ONAKOYA, 2012. "Does Foreign Aid Accelerate Economic Growth? An Empirical Analysis for Nigeria," International Journal of Economics and Financial Issues, Econjournals, vol. 2(4), pages 423-431.
    5. repec:kap:jbuset:v:146:y:2017:i:3:d:10.1007_s10551-015-2940-6 is not listed on IDEAS

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