Measuring aid flows : a new approach
Debate about the effectiveness of foreign aid has intensified in recent years, as budgetary pressures on aid have increased in donor countries. Whatever the merits of opposing arguments, the question is: do conventional measures of aid (such as OECD's Net ODA), which lump together grants and loans, accurately reflect true aid flows? The authors analyze the methodological shortcomings of conventional measures of aid and propose a new approach, which measures official aid flows as the sum of grants and the grant-equivalents of official loans (in a new aggregate they call"Effective Development Assistance,"or EDA). They show how results using this conceptually superior measure may differ significantly from conventional aggregates, providing a quite different view on major aid trends. They implement their approach empirically using data on some 40,000 official loans from the World Bank's DRS database--virtually all of the official loans to 133 developing countries from 1975 to 1995. The numerical results underscore several points: 1) The conventional approach has led to systematic overestimates of the concessionality of official loans. This overestimate has increased significantly since the mid-1980s. Conventional methods show a rising trend; the new method shows the opposite. 2) Net ODA increasingly overstates the true aid content of official flows, although the divergence between the two approaches is somewhat muted by the rising relative importance of grants over loans in total official flows.
|Date of creation:||28 Feb 1999|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
References listed on IDEAS
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.:
- Claessens,Constantijn A.*Diwan, Ishac*Fernandez-, 1992. "Recent experience with commercial bank debt reduction," Policy Research Working Paper Series 995, The World Bank.
- Demirguc-Kunt, Asli & Fernandez-Arias, Eduardo, 1992. "Burden-sharing among official and private creditors," Policy Research Working Paper Series 943, The World Bank.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:2050. 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: (Roula I. Yazigi)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.