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Improving upon the World Bank's Country Policy and Institutional Assessment: A New Performance Indicator Based on Aid Effectiveness

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  • Julia Cage

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

Abstract

This article questions the relevance of the different measures of policy performance that are currently used by international organizations to allocate development aid. It evaluates more especially the pertinence of the World Bank's Country Policy and Institutional Assessment (CPIA). Using a cross-country panel dataset over 146 countries between 1977 and 2008, I show that while the CPIA is correlated with current growth, it is not a good predictor for future growth. I then discuss the relevance of several instruments for aid allocation. In particular, I propose a performance indicator based on "aid effectiveness" to allocate aid selectively, and discuss a new way of assessing time-varying aid effectiveness.

Suggested Citation

  • Julia Cage, 2015. "Improving upon the World Bank's Country Policy and Institutional Assessment: A New Performance Indicator Based on Aid Effectiveness," Post-Print hal-03392998, HAL.
    • Handle: RePEc:hal:journl:hal-03392998
    DOI: 10.1515/jgd-2013-0007
    as

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    References listed on IDEAS

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    1. Wood, Adrian, 2008. "Looking Ahead Optimally in Allocating Aid," World Development, Elsevier, vol. 36(7), pages 1135-1151, July.
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