2006World Bank, Washington, DC eBooksOpen access

What Is Effective Aid? How Would Donors Allocate It?

Charles J. Kenny

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Abstract

There are significant weaknesses in some of the traditional justifications for assuming that aid will foster development. This paper looks at what the cross-national aid effectiveness literature suggests about effective aid, first in terms of promoting income growth and then for promoting other goals. This review forms the basis for a discussion of recommendations to improve aid effectiveness and a discussion of effective aid allocation. Given the multiple potential objectives for aid, there is no one right answer. However, it appears that there are a number of reforms to aid practices and distribution that might help to deliver a more significant return to aid resources. Il y a d'importantes faiblesses dans la pensee traditionnelle qui pretend que l'aide stimulera le developpement. Cet article etudie ce que dit la litterature sur l'efficacite de l'aide internationale a ce sujet, d'abord vis-a-vis de la croissance du revenu, puis au regard de ses autres objectifs. Ce bilan constitue une base pour des recommandations visant a ameliorer l'efficacite de l'aide et pour une discussion sur l'efficacite de l'attribution de l'aide. Etant donne les determinants multiples de l'allocation de l'aide, il n'y a pas une seule bonne reponse. Cependant, un certain nombre de reformes concernant les pratiques et la distribution de l'aide pourrait contribuer a ameliorer le rendement de l'aide.

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What this paper is about

There are significant weaknesses in some of the traditional justifications for assuming that aid will foster development. This paper looks at what the cross-national aid effectiveness literature suggests about effective aid, first in terms of promoting income growth and then for promoting other goals. This review forms the basis for a discussion of recommendations to improve aid effectiveness and a discussion of effective aid allocation. Given the multiple potential objectives for aid, there is no one right answer. However, it appears that there are a number of reforms to aid practices and distribution that might help to deliver a more significant return to aid resources. Il y a d'importantes faiblesses dans la pensee traditionnelle qui pretend que l'aide stimulera le developpement. Cet article etudie ce que dit la litterature sur l'efficacite de l'aide internationale a ce sujet, d'abord vis-a-vis de la croissance du revenu, puis au regard de ses autres objectifs. Ce bilan constitue une base pour des recommandations visant a ameliorer l'efficacite de l'aide et pour une discussion sur l'efficacite de l'attribution de l'aide. Etant donne les determinants multiples de l'allocation de l'aide, il n'y a pas une seule bonne reponse. Cependant, un certain nombre de reformes concernant les pratiques et la distribution de l'aide pourrait contribuer a ameliorer le rendement de l'aide.

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Available abstract

There are significant weaknesses in some of the traditional justifications for assuming that aid will foster development. This paper looks at what the cross-national aid effectiveness literature suggests about effective aid, first in terms of promoting income growth and then for promoting other goals. This review forms the basis for a discussion of recommendations to improve aid effectiveness and a discussion of effective aid allocation. Given the multiple potential objectives for aid, there is no one right answer. However, it appears that there are a number of reforms to aid practices and distribution that might help to deliver a more significant return to aid resources. Il y a d'importantes faiblesses dans la pensee traditionnelle qui pretend que l'aide stimulera le developpement. Cet article etudie ce que dit la litterature sur l'efficacite de l'aide internationale a ce sujet, d'abord vis-a-vis de la croissance du revenu, puis au regard de ses autres objectifs. Ce bilan constitue une base pour des recommandations visant a ameliorer l'efficacite de l'aide et pour une discussion sur l'efficacite de l'attribution de l'aide. Etant donne les determinants multiples de l'allocation de l'aide, il n'y a pas une seule bonne reponse. Cependant, un certain nombre de reformes concernant les pratiques et la distribution de l'aide pourrait contribuer a ameliorer le rendement de l'aide.

Key concepts: Fungibility, Aid effectiveness, Development aid, Business, Public economics, Test (biology), Economics, Developing country

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