Adapting Aid Allocation Criteria to Development Goals
This paper analyzes aid allocation from a normative point of view. It attempts to design aid allocation criteria adapted to development goals and combining the principles of effectiveness and equity in a transparent and integrated framework. The common view about aid selectivity, which essentially refers to the quality of governance and policy indicators, is challenged for several reasons, in particular the weakness of the relationship between these indicators and aid effectiveness and the risk of countries facing exogeneous difficulties being left behind. Consistent with the lessons of the literature on aid effectiveness, new criteria for aid allocation are proposed, in particular that of structural vulnerability which has been shown to increase the marginal effectiveness of aid, because aid dampens its negative effects. Moreover, equity principles in aid allocation involve promoting equal opportunities (for economic growth and to reduce poverty), which means giving more aid to countries facing more severe structural handicaps. Thus a rational basis is given for allocating more aid to the LDCs (least developed countries), designated as low income countries suffering the most from structural handicaps. Using the Economic Vulnerability Index (EVI) set up for the identification of LDCs also leads to giving special attention to small and vulnerable countries which are not LDCs, and to fragile states as well.
|Date of creation:||17 Jan 2011|
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- François Bourguignon & Boris Pleskovic & André Sapir, 2005. "Annual World Bank Conference on Development Economics--Europe 2005 : Are We on Track to Achieve the Millennium Development Goals?," World Bank Publications, The World Bank, number 7381, April.
- Sylviane GUILLAUMONT JEANNENEY & Patrick GUILLAUMONT & Jacky AMPROU, 2006.
"Aid Selectivity According to Augmented Criteria,"
- Patrick Guillaumont & Sylviane Guillaumont Jeanneney & Jacky Amprou, 2011. "Aid Selectivity According to Augmented Criteria," Working Papers halshs-00562658, HAL.
- Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY & Jacky AMPROU, 2005. "Aid Selectivity According to Augmented Criteria," Working Papers 200526, CERDI.
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