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How to take into account vulnerability in aid allocation criteria and lack of human capital as well: improving the performance based allocation

Author

Listed:
  • Patrick GUILLAUMONT

    (Ferdi)

  • Sylviane GUILLAUMONT JEANNENEY

    (Ferdi)

  • Laurent WAGNER

    (Ferdi)

Abstract

This paper considers why and how the Performance Based Allocation (PBA) used in multilateral development banks and in particular at IDA, could be improved by taking the structural handicaps of eligible countries into account. The PBA relies on a debatable definition of performance. It does not meet the equity concern raised by the existence of structural handicaps to growth. It neglects the lessons of the aid effectiveness literature. Finally, it suffers from some opacity. We show how it is possible to increase the share of specific groups of countries, such as Sub-Sahara Africa or post-conflict states, in a transparent manner.

Suggested Citation

  • Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY & Laurent WAGNER, 2015. "How to take into account vulnerability in aid allocation criteria and lack of human capital as well: improving the performance based allocation," Working Papers P13 - update version, FERDI.
  • Handle: RePEc:fdi:wpaper:1971
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    File URL: http://www.ferdi.fr/sites/www.ferdi.fr/files/publication/fichiers/p13_how_to_take_account_vulnerability_maj_janv_2015_0.pdf
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    References listed on IDEAS

    as
    1. 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.
    2. Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY, 2009. "Accounting for Vulnerability of African Countries in Performance Based Aid Allocation," Working Papers P08, FERDI.
    3. Paul Collier, 2012. "How To Spend It: The Organization of Public Spending and Aid Effectiveness," WIDER Working Paper Series wp-2012-005, World Institute for Development Economic Research (UNU-WIDER).
    4. Patrick GUILLAUMONT & Mark McGILLIVRAY & Laurent WAGNER, 2013. "Performance Assessment: How it Depends on Structural Economic Vulnerabilty and Human Capital. Implications for the Allocation of Aid," Working Papers P71, FERDI.
    5. Patrick Guillaumont, 2009. "An Economic Vulnerability Index: Its Design and Use for International Development Policy," Post-Print hal-00416800, HAL.
    6. Patrick GUILLAUMONT, 2008. "Adapting Aid Allocation Criteria to Development Goals," Working Papers P01, FERDI.
    7. Laurent Wagner, 2007. "Thresholds in Aid Effectiveness," Post-Print hal-00177460, HAL.
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    9. Lisa CHAUVET & Patrick GUILLAUMONT, 2003. "Aid and Growth Revisited: Policy, Economic Vulnerability and Political Instability," Working Papers 200327, CERDI.
    10. Bulír, Ales & Hamann, A. Javier, 2008. "Volatility of Development Aid: From the Frying Pan into the Fire?," World Development, Elsevier, vol. 36(10), pages 2048-2066, October.
    11. P. Guillaumont & L. Chauvet, 2001. "Aid and Performance: A Reassessment," Journal of Development Studies, Taylor & Francis Journals, vol. 37(6), pages 66-92.
    12. Patrick Guillaumont & Sylviane Guillaumont Jeanneney & Désiré Vencatachellum, 2009. "Accounting for Vulnerability of African Countries in Performance Based Aid Allocation," Post-Print hal-00444193, HAL.
    13. Lisa Chauvet & Patrick Guillaumont, 2009. "Aid, Volatility, and Growth Again: When Aid Volatility Matters and When it Does Not," Review of Development Economics, Wiley Blackwell, vol. 13(3), pages 452-463, August.
    14. Akramov, Kamiljon T., 2012. "Foreign aid allocation, governance, and economic growth:," Issue briefs 72, International Food Policy Research Institute (IFPRI).
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    18. repec:fpr:resrep:kamiljonakramov is not listed on IDEAS
    19. Patrick Guillaumont, 2009. "Caught in a trap. Identifying the least developed countries," Post-Print hal-00436331, HAL.
    20. repec:unu:wpaper:wp2012-05 is not listed on IDEAS
    21. Hudson, John, 2015. "Consequences of Aid Volatility for Macroeconomic Management and Aid Effectiveness," World Development, Elsevier, vol. 69(C), pages 62-74.
    22. Kanbur, Ravi, 2005. "Reforming the Formula: A Modest Proposal for Introducing Development Outcomes in IDA Allocation Procedures," CEPR Discussion Papers 4971, C.E.P.R. Discussion Papers.
    23. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, vol. 64(2), pages 547-570, April.
    24. Benjamin Leo, 2010. "Inside the World Bank’s Black Box Allocation System: How Well Does IDA Allocate Resources to the Neediest and Most Vulnerable Countries?," Working Papers 216, Center for Global Development.
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    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Patrick GUILLAUMONT & Catherine SIMONET, 2011. "To what extent are African Countries Vulnerable to climate change? Lessons from a new indicator of Physical Vulnerability to Climate Change," Working Papers I08, FERDI.
    2. Matthieu Boussichas & Tancrede Voituriez & Julie Vaillé, 2019. "Tackling inequalities and vulnerabilities: Why and how G7 development policies could do better," Working Papers hal-02288094, HAL.
    3. Patrick Guillaumont & Laurent Wagner, 2022. "Three criteria that a multidimensional vulnerability index should meet to be used effectively [Trois critères que doit remplir un indice de vulnérabilité multidimensionnelle pour être utilisé effic," Post-Print hal-03662944, HAL.
    4. Mathilde Closset & Sosso Feindouno & Patrick Guillaumont & Catherine Simonet, 2017. "A Physical Vulnerability to Climate Change Index: Which are the most vulnerable developing countries?," Post-Print hal-01719925, HAL.
    5. Yasemin Bal Gündüz & Masyita Crystallin, 2018. "Do IMF programs catalyze donor assistance to low-income countries?," The Review of International Organizations, Springer, vol. 13(3), pages 359-393, September.
    6. Feindouno, Sosso & Guillaumont, Patrick & Simonet, Catherine, 2020. "The Physical Vulnerability to Climate Change Index: An Index to Be Used for International Policy," Ecological Economics, Elsevier, vol. 176(C).
    7. Mehmet Pinar & Thanasis Stengos & Nikolas Topaloglou, 2022. "Stochastic dominance spanning and augmenting the human development index with institutional quality," Annals of Operations Research, Springer, vol. 315(1), pages 341-369, August.
    8. Patrick Guillaumont & Sylviane Guillaumont Jeanneney & Laurent Wagner, 2021. "How to Allocate New External Financing to African Countries? The Vulnerability Challenge. A Briefing in Response to the Paris Summit on Financing African Economies [Comment allouer les financements," Post-Print hal-03218024, HAL.
    9. Gnangnon, Sèna Kimm, 2022. "Effect of structural economic vulnerability on the participation in international trade," EconStor Preprints 262004, ZBW - Leibniz Information Centre for Economics.
    10. Sena Kimm Gnangnon, 2022. "Effect of Structural Economic Vulnerability on the Participation in International Trade," JRFM, MDPI, vol. 15(9), pages 1-36, September.
    11. Lisa Chauvet & Marin Ferry, 2023. "L’efficacité de l’aide : quelles évolutions de la littérature depuis deux décennies ? WP329," Working Papers hal-04141543, HAL.
    12. Akame, Afuge & Mavrotas, George, 2024. "The differential effects of foreign aid to sub-Saharan Africa," IOB Discussion Papers 2024.01, Universiteit Antwerpen, Institute of Development Policy (IOB).

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    More about this item

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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