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Foreign Aid for Capacity-Building to Address Climate Change: Insights and Applications


  • Victor, David G.


The paper examines the role of foreign aid in building capacity to address climate change. While the experience with this topic is relatively recent and not yet extensive, analogous questions have arisen in many other areas of foreign aid. It is likely that climate change aid programmes work best in countries with well-functioning systems of public administration, sound management of public finances, and independent media that hold government accountable for performance–all factors widely known to make other aid programmes more effective and adaptive. As countries try to expand climate aid quickly, historical patterns suggest bilateral aid–which is easier for donors and recipients to control–is likely to expand much more than multilateral aid. A shift is also likely from an emphasis on mitigation of emissions to a growing role for adaptation. Expanding climate aid must confront what I call the `aid paradox´, which is that the conditions of national capacity under which aid is most likely to be effective are least likely to be present in the countries that are most in need of foreign aid because they cannot raise needed funds on their own.

Suggested Citation

  • Victor, David G., 2013. "Foreign Aid for Capacity-Building to Address Climate Change: Insights and Applications," WIDER Working Paper Series 084, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:wp2013-084

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    References listed on IDEAS

    1. Martens,Bertin & Mummert,Uwe & Murrell,Peter & Seabright,Paul, 2008. "The Institutional Economics of Foreign Aid," Cambridge Books, Cambridge University Press, number 9780521055390, March.
    2. Clausen, Volker & Schürenberg-Frosch, Hannah, 2012. "Aid, spending strategies and productivity effects: A multi-sectoral CGE analysis for Zambia," Economic Modelling, Elsevier, vol. 29(6), pages 2254-2268.
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    4. Barbara Buchner & Jessica Brown & Jan Corfee-Morlot, 2011. "Monitoring and Tracking Long-Term Finance to Support Climate Action," OECD/IEA Climate Change Expert Group Papers 2011/3, OECD Publishing.
    5. Hristos Doucouliagos & Martin Paldam, 2005. "Aid Effectiveness on Growth. A Meta Study," Economics Working Papers 2005-13, Department of Economics and Business Economics, Aarhus University.
    6. David Popp, 2011. "International Technology Transfer, Climate Change, and the Clean Development Mechanism," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 5(1), pages 131-152, Winter.
    7. R. Lensink & H. White, 2001. "Are There Negative Returns to Aid?," Journal of Development Studies, Taylor & Francis Journals, vol. 37(6), pages 42-65.
    8. Hristos Doucouliagos & Martin Paldam, 2009. "The Aid Effectiveness Literature: The Sad Results Of 40 Years Of Research," Journal of Economic Surveys, Wiley Blackwell, vol. 23(3), pages 433-461, July.
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    12. Kanbur, Ravi & Sandler, Todd & Morrison, Kevin, 1999. "The Future of Development Assistance: Common Pools and International Public Goods," Staff General Research Papers Archive 1629, Iowa State University, Department of Economics.
    13. William Easterly, 2009. "Can the West Save Africa?," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 373-447, June.
    14. Riddell, Roger C., 2008. "Does Foreign Aid Really Work?," OUP Catalogue, Oxford University Press, number 9780199544462, June.
    15. Sukumar Ganapati & Liguang Liu, 2009. "Sustainable development in the Clean Development Mechanism: the role of Designated National Authority in China and India," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 52(1), pages 43-60.
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