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Shooting the messenger of good news: a critical look at the World Bank's success story of effective aid

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  • Nunnenkamp, Peter

Abstract

In a report presented at the UN Conference on Financing for Development in March 2002, the World Bank claims that the effectiveness of its financial aid has improved substantially by targeting aid at poor developing countries pursuing sound economic policies. However, the World Bank's success story rests on an extremely weak foundation: First, the institution's contribution to financial rescue packages for some emerging markets, rather than poverty concerns and policy assessments, dominated the distribution of World Bank financing. Second, the picture portrayed in the report takes a bad turn if only two outliers with extremely high per capita aid (Cape Verde and Honduras) are excluded from the sample. Third, according to our regression results, the allocation of World Bank aid did not improve in the course of the 1990s.

Suggested Citation

  • Nunnenkamp, Peter, 2002. "Shooting the messenger of good news: a critical look at the World Bank's success story of effective aid," Kiel Working Papers 1103, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1103
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    File URL: https://www.econstor.eu/bitstream/10419/2751/1/kap1103.pdf
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    References listed on IDEAS

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    1. Collier, Paul & Dollar, David, 2001. "Can the World Cut Poverty in Half? How Policy Reform and Effective Aid Can Meet International Development Goals," World Development, Elsevier, vol. 29(11), pages 1787-1802, November.
    2. World Bank, 2000. "World Development Indicators 2000," World Bank Publications - Books, The World Bank Group, number 13828, December.
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    Cited by:

    1. Langhammer, Rolf J., 2002. "Halving poverty by doubling aid: how well founded is the optimism of the World Bank?," Kiel Working Papers 1116, Kiel Institute for the World Economy (IfW Kiel).
    2. Rolf J. Langhammer, 2004. "Halving Poverty by Doubling Aid: Is There Reason for Optimism?," The World Economy, Wiley Blackwell, vol. 27(1), pages 81-98, January.
    3. Ashwani Saith, 2006. "Forum 2006," Development and Change, International Institute of Social Studies, vol. 37(6), pages 1167-1199, November.
    4. Thiele, Rainer, 2003. "Perspektiven der Entwicklungszusammenarbeit," Open Access Publications from Kiel Institute for the World Economy 2899, Kiel Institute for the World Economy (IfW Kiel).
    5. Nunnenkamp, Peter, 2003. "Systemic factors and economic development in Islamic countries," Open Access Publications from Kiel Institute for the World Economy 4319, Kiel Institute for the World Economy (IfW Kiel).

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    More about this item

    Keywords

    World Bank; International Development Association; financial aid;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid

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