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Who deserves aid? Equality of opportunity,international aid and poverty reduction

  • Denis Cogneau

    ()

    (DIAL, IRD, Paris)

  • Jean-David Naudet

    ()

    (AFD, Département de la Recherche)

(english) 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. _________________________________ (français) Nous élaborons et mettons en oeuvre une procédure normative d’allocation de l’aide internationale entre les pays, fondée sur le principe de l’égalité des chances vis-à-vis du risque de pauvreté. Cette procédure constitue une alternative à celle de Collier et Dollar (2001) qui maximise l’impact de l’aide sur la réduction de la pauvreté dans le monde. Du point de vue de la justice distributive, l’allocation de Collier et Dollar présente en effet l’inconvénient majeur de laisser subsister de très larges inégalités de risques de pauvreté entre des individus vivant dans des pays dont les handicaps structurels sont très différents. Notre travail s’inspire des théories « post-welfaristes » de la justice sociale, et en particulier de l’approche de John Roemer. Il fait toutefois une proposition très différente de celle de Llavador et Roemer (2001) qui comporte d’importants défauts de méthode et aboutit selon nous à des résultats contradictoires. Comme les allocations préconisées par Collier et Dollar, les solutions proposées ici diffèrent de la répartition actuelle de l’aide dans le sens où elles privilégient les pays les plus pauvres. Au-delà de ce résultat commun, le principe d’égalité des chances que nous mettons en avant conduit à prendre en compte les handicaps structurels de croissance plutôt que la qualité des politiques passées. Enfin, le type d’allocation que nous proposons égalise beaucoup mieux les risques de pauvreté entre les citoyens du monde, tout en réduisant presque aussi efficacement la pauvreté mondiale que l’allocation de Collier et Dollar.

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File URL: http://www.dial.ird.fr/media/ird-sites-d-unites-de-recherche/dial/documents/publications/doc_travail/2004/2004-10
File Function: First version, 2004
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Paper provided by DIAL (Développement, Institutions et Mondialisation) in its series Working Papers with number DT/2004/10.

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Length: 27 pages
Date of creation: Nov 2004
Date of revision:
Handle: RePEc:dia:wpaper:dt200410
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  1. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
  2. Patrick GUILLAUMONT & Lisa CHAUVET, 1999. "Aid and Performance: A Reassessment," Working Papers 199910, CERDI.
  3. 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.
  4. Collier, Paul & Dollar, David, 1999. "Aid allocation and poverty reduction," Policy Research Working Paper Series 2041, The World Bank.
  5. David Roodman, 2004. "The Anarchy of Numbers: Aid, Development, and Cross-country Empirics," Development and Comp Systems 0412003, EconWPA.
  6. Daron Acemoglu & Simon Johnson & James Robinson & Yunyong Thaicharoen, 2002. "Institutional Causes, Macroeconomic Symptoms: Volatility, Crises and Growth," NBER Working Papers 9124, National Bureau of Economic Research, Inc.
  7. Oecd, 2002. "Aid volume, channels and allocations for poverty reduction," OECD Journal on Development, OECD Publishing, vol. 3(3), pages 33-46.
  8. Daniel Kaufmann & Aart Kraay, 2004. "Governance Indicators, Aid Allocation, and the Millennium Challenge Account," Development and Comp Systems 0405013, EconWPA.
  9. 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.
  10. Dollar, David & Alesina, Alberto, 2000. "Who Gives Foreign Aid to Whom and Why?," Scholarly Articles 4553020, Harvard University Department of Economics.
  11. Dirk Van de gaer & Michel Martinez & Erik Schokkaert, 1998. "Measuring Intergenerational Mobility and Equality of Opportunity," Center for Economic Studies - Discussion papers ces9810, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
  12. 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.
  13. Burnside, Craig & Dollar, David, 2004. "Aid, policies, and growth : revisiting the evidence," Policy Research Working Paper Series 3251, The World Bank.
  14. McGillivray, Mark, 2003. "Descriptive and Prescriptive Analyses of Aid Allocation: Approaches, Issues and Consequences," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  15. Roemer, J.E., 1989. "Distributing Health: The Allocationof Resources by an International Agency," Research Paper 71, World Institute for Development Economics Research.
  16. 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.
  17. 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.
  18. McGillivray, Mark, 2003. "Modelling Aid Allocation: Issues, Approaches and Results," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  19. Berthelemy, Jean-Claude & Tichit, Ariane, 2002. "Bilateral Donors' Aid Allocation Decisions: A Three-dimensional Panel Analysis," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  20. repec:rus:hseeco:72137 is not listed on IDEAS
  21. 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.
  22. 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).
  23. Carl-Johan Dalgaard & Henrik Hansen & Finn Tarp, 2001. "On the Empirics of Foreign Aid and Growth," EPRU Working Paper Series 03-13, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics, revised Sep 2003.
  24. 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.
  25. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "Reversal of Fortune: Geography and Institutions in the Making of the Modern World Income Distribution," NBER Working Papers 8460, National Bureau of Economic Research, Inc.
  26. 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.
  27. Knack, Stephen, 2000. "Aid dependence and the quality of governance : a cross-country empirical analysis," Policy Research Working Paper Series 2396, The World Bank.
  28. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, vol. 64(2), pages 547-570, April.
  29. Dollar, David & Levin, Victoria, 2004. "Increasing selectivity of foreign aid, 1984-2002," Policy Research Working Paper Series 3299, The World Bank.
  30. Collier, Paul & Dehn, Jan, 2001. "Aid, shocks, and growth," Policy Research Working Paper Series 2688, The World Bank.
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