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Does Aid Availability Affect Effectiveness in Reducing Poverty? A Review Article

Author

Listed:
  • François Bourguignon

    (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Jean-Philippe Platteau

    (NES - New Economics School - New Economics School)

Abstract

This paper addresses the impact of aid supply on aid effectiveness. First, we review theoretical literature that deals with the problem of governance in donor–recipient relationships and are susceptible of highlighting effects of aggregate aid availability. Second, we provide a conceptual framework that explicitly incorporates a trade-off between considerations of needs and governance. We examine the impact of aid supply on the manner in which a donor agency allocates the available money between countries differing in terms of both needs and domestic governance. The central conclusion is that a donor's utility function that embodies the need-governance trade-off and the associated optimization mechanism yield a meaningful rule to guide inter-country allocation of aid resources.

Suggested Citation

  • François Bourguignon & Jean-Philippe Platteau, 2017. "Does Aid Availability Affect Effectiveness in Reducing Poverty? A Review Article," Post-Print halshs-01513300, HAL.
    • Handle: RePEc:hal:journl:halshs-01513300
    DOI: 10.1016/j.worlddev.2015.06.003
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    Cited by:

    1. Munyanyi, Musharavati Ephraim & Awaworyi Churchill, Sefa, 2022. "Foreign aid and energy poverty: Sub-national evidence from Senegal," Energy Economics, Elsevier, vol. 108(C).
    2. Manabu Nose, 2022. "Decentralized provision of disaster aid: aid fragmentation and the poverty implications," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 29(5), pages 1098-1127, October.
    3. Gnangnon, Sèna Kimm, 2020. "Aid for Trade flows and Poverty Reduction in Recipient-Countries," EconStor Preprints 213807, ZBW - Leibniz Information Centre for Economics.
    4. 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.
    5. Bourguignon, François & Platteau, Jean-Philippe, 2025. "Aid allocation with optimal monitoring: Theory and policy," Journal of Development Economics, Elsevier, vol. 172(C).
    6. Romain Houssa & Kelbesa Megersa, 2020. "Capacity Support for Domestic Revenue Mobilization - The case of Belgian development cooperation and partner countries," BeFinD Working Papers 0131, University of Namur, Department of Economics.

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