IDEAS home Printed from https://ideas.repec.org/p/fdi/wpaper/682.html
   My bibliography  Save this paper

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 PBA (performance based allocation) used in multilateral development banks and in particular at IDA, could be improved by taking the structural vulnerability of eligible countries into account. This improvement is needed for several reasons. 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, in particular vulnerability and lack of human capital. It neglects the lessons of the aid effectiveness literature, in particular on the shock dampening effect of aid.

Suggested Citation

  • Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY & Laurent WAGNER, 2010. "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, FERDI.
  • Handle: RePEc:fdi:wpaper:682
    as

    Download full text from publisher

    File URL: http://www.ferdi.fr/sites/www.ferdi.fr/files/publication/fichiers/P13_Guillaumont_WagnerWEB.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ramey, Garey & Ramey, Valerie A, 1995. "Cross-Country Evidence on the Link between Volatility and Growth," American Economic Review, American Economic Association, vol. 85(5), pages 1138-1151, December.
    2. 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.
    3. Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY, 2009. "Accounting for Vulnerability of African Countries in Performance Based Aid Allocation," Working Papers P08, FERDI.
    4. 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.
    5. David Fielding & George Mavrotas, 2008. "Aid Volatility and Donor–Recipient Characteristics in ‘Difficult Partnership Countries’," Economica, London School of Economics and Political Science, vol. 75(299), pages 481-494, August.
    6. Laurent Wagner, 2007. "Thresholds in Aid Effectiveness," Post-Print hal-00177460, HAL.
    7. David Roodman, 2007. "The Anarchy of Numbers: Aid, Development, and Cross-Country Empirics," World Bank Economic Review, World Bank Group, vol. 21(2), pages 255-277, May.
    8. 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.
    9. Patrick Guillaumont, 2009. "An Economic Vulnerability Index: Its Design and Use for International Development Policy," Post-Print hal-00416800, HAL.
    10. Paul Collier & Benedikt Goderis, 2007. "Does aid mitigate external shocks?," CSAE Working Paper Series 2007-18, Centre for the Study of African Economies, University of Oxford.
    11. Paul Collier & Benedikt Goderis, 2009. "Does Aid Mitigate External Shocks?," Review of Development Economics, Wiley Blackwell, vol. 13(s1), pages 429-451, August.
    12. Hudson, John, 2015. "Consequences of Aid Volatility for Macroeconomic Management and Aid Effectiveness," World Development, Elsevier, vol. 69(C), pages 62-74.
    13. 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.
    14. P. Guillaumont & L. Chauvet, 2001. "Aid and Performance: A Reassessment," Journal of Development Studies, Taylor & Francis Journals, vol. 37(6), pages 66-92.
    15. Akramov, Kamiljon T., 2012. "Foreign aid allocation, governance, and economic growth," IFPRI books, International Food Policy Research Institute (IFPRI), number Kamiljon Akramov, Winter.
    16. Patrick Guillaumont, 2009. "An Economic Vulnerability Index: Its Design and Use for International Development Policy," Oxford Development Studies, Taylor & Francis Journals, vol. 37(3), pages 193-228.
    17. Patrick Guillaumont & Sylviane Guillaumont Jeanneney & Désiré Vencatachellum, 2009. "Accounting for Vulnerability of African Countries in Performance Based Aid Allocation," Post-Print hal-00444193, HAL.
    18. Kanbur, Ravi & Sumner, Andy, 2011. "Poor Countries or Poor People? Development Assistance and the New Geography of Global Poverty," CEPR Discussion Papers 8489, C.E.P.R. Discussion Papers.
    19. Akramov, Kamiljon T., 2012. "Foreign aid allocation, governance, and economic growth:," Issue briefs 72, International Food Policy Research Institute (IFPRI).
    20. Benjamin Leo, 2010. "Leveraging World Bank Resources for the Poorest: IDA Blended Financing Facility Proposal - Working Paper 214," Working Papers 214, Center for Global Development.
    21. Kodama, Masahiro, 2012. "Aid Unpredictability and Economic Growth," World Development, Elsevier, vol. 40(2), pages 266-272.
    22. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, vol. 64(2), pages 547-570, April.
    23. Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY, 2014. "For a new instrument supporting regional integration in Africa to be implemented by the African Development Bank," Working Papers P83, FERDI.
    24. William Easterly & Ross Levine & David Roodman, 2004. "Aid, Policies, and Growth: Comment," American Economic Review, American Economic Association, vol. 94(3), pages 774-780, June.
    25. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
    26. repec:fpr:resrep:kamiljonakramov is not listed on IDEAS
    27. Laurent Wagner, 2014. "Identifying thresholds in aid effectiveness," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(3), pages 619-638, August.
    28. Patrick Guillaumont, 2009. "Caught in a trap. Identifying the least developed countries," Post-Print hal-00436331, HAL.
    29. repec:unu:wpaper:wp2012-05 is not listed on IDEAS
    30. Stefan C. Norrbin & F. Pinar Yigit, 2005. "The Robustness of the Link between Volatility and Growth of Output," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(2), pages 343-356, July.
    31. 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.
    32. repec:fpr:ifprib:kamiljonakramov is not listed on IDEAS
    33. 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(s1), pages 452-463, August.
    34. repec:dau:papers:123456789/5400 is not listed on IDEAS
    35. Collier, Paul, 2012. "How To Spend It: The Organization of Public Spending and Aid Effectiveness," WIDER Working Paper Series 005, World Institute for Development Economic Research (UNU-WIDER).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. 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.
    3. 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.
    4. 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.
    5. 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).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pham, Ngoc-Sang & Pham, Thi Kim Cuong, 2020. "Effects of foreign aid on the recipient country’s economic growth," Journal of Mathematical Economics, Elsevier, vol. 86(C), pages 52-68.
    2. Patrick GUILLAUMONT, 2009. "Aid effectiveness for poverty reduction: macroeconomic overview and emerging issues," Working Papers P05, FERDI.
    3. Patrick Guillaumont & Laurent Wagner, 2014. "Aid Effectiveness for Poverty Reduction: Lessons from Cross?country Analyses, with a Special Focus on Vulnerable Countries," Revue d’économie du développement, De Boeck Université, vol. 22(HS01), pages 217-261.
    4. Thi Kim Cuong PHAM & Ngoc-Sang PHAM, 2017. "Economic growth and escaping the poverty trap: how does development aid work?," Working Papers P197, FERDI.
    5. Patrick Guillaumont, 2009. "An Economic Vulnerability Index: Its Design and Use for International Development Policy," Oxford Development Studies, Taylor & Francis Journals, vol. 37(3), pages 193-228.
    6. Lisa Chauvet & Marin Ferry & Patrick Guillaumont & Sylviane Guillaumont Jeanneney & Sampawende J.-A. Tapsoba & Laurent Wagner, 2019. "Volatility widens inequality. Could aid and remittances help?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 155(1), pages 71-104, February.
    7. Momita, Yasuaki & Matsumoto, Tomoya & Otsuka, Keijiro, 2019. "Has ODA contributed to growth? An assessment of the impact of Japanese ODA," Japan and the World Economy, Elsevier, vol. 49(C), pages 161-175.
    8. Kyriakos C. Neanidis & Dimitrios Varvarigos, 2007. "The Allocation of volatile aid and economic growth: Evidence and a suggestive theory," Discussion Paper Series 2007_07, Department of Economics, Loughborough University, revised Mar 2007.
    9. Boateng, Elliot & Agbola, Frank W. & Mahmood, Amir, 2021. "Foreign aid volatility and economic growth in Sub-Saharan Africa: Does institutional quality matter?," Economic Modelling, Elsevier, vol. 96(C), pages 111-127.
    10. Kathavate, Jay & Mallik, Girijasankar, 2012. "The impact of the Interaction between institutional quality and aid volatility on growth: theory and evidence," Economic Modelling, Elsevier, vol. 29(3), pages 716-724.
    11. Laurent Wagner, 2014. "Identifying thresholds in aid effectiveness," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(3), pages 619-638, August.
    12. Aurore Gary & Mathilde Maurel, 2013. "The effect of donors' policy coherence on growth," Post-Print halshs-00825816, HAL.
    13. Aurore Gary & Mathilde Maurel, 2013. "The effect of donors' policy coherence on growth," Documents de travail du Centre d'Economie de la Sorbonne 13046, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    14. Juliana Yael Milovich, 2018. "Does Aid Reduce Poverty?," OPHI Working Papers ophiwp122.pdf, Queen Elizabeth House, University of Oxford.
    15. Kimura, Hidemi & Mori, Yuko & Sawada, Yasuyuki, 2012. "Aid Proliferation and Economic Growth: A Cross-Country Analysis," World Development, Elsevier, vol. 40(1), pages 1-10.
    16. León-González, Roberto & Montolio, Daniel, 2015. "Endogeneity and panel data in growth regressions: A Bayesian model averaging approach," Journal of Macroeconomics, Elsevier, vol. 46(C), pages 23-39.
    17. S. Guillaumont Jeanneney & S. J‐A. Tapsoba, 2012. "Aid and Income Stabilization," Review of Development Economics, Wiley Blackwell, vol. 16(2), pages 216-229, May.
    18. Montfort Mlachila & René Tapsoba & Sampawende J. A. Tapsoba, 2017. "A Quality of Growth Index for Developing Countries: A Proposal," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 134(2), pages 675-710, November.
    19. Patrick Guillaumont, 2010. "Assessing the Economic Vulnerability of Small Island Developing States and the Least Developed Countries," Journal of Development Studies, Taylor & Francis Journals, vol. 46(5), pages 828-854.
    20. Temple, Jonathan R.W., 2010. "Aid and Conditionality," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4415-4523, Elsevier.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fdi:wpaper:682. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/ferdifr.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Vincent Mazenod (email available below). General contact details of provider: https://edirc.repec.org/data/ferdifr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.