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Background paper : 'Aid effectiveness and selectivity : integrating multiple objectives into aid allocation'

Version 2 2024-06-17, 07:06
Version 1 2014-10-28, 09:01
journal contribution
posted on 2024-06-17, 07:06 authored by M McGillivray
Research on development aid has largely focused on the effectiveness of these transfers in promoting growth or on their allocation among developing countries. Rarely if ever did these research areas intersect, in that studies seeking to explain observed or prescribe optimal inter-country aid allocations did not take into account effectiveness issues and vice versa. Collier and Dollar (C-D, 2002), in a move broadly consistent with the IDA’s long-standing approach to its country allocation system, changed this state of affairs with their “aid selectivity” approach to inter-country aid allocation. C-D, building on the empirical work of Burnside and Dollar (B-D, 1997, 2000), which concluded that the effectiveness of aid in promoting growth depended on the policy regimes of recipient countries, derived “poverty efficient” inter-recipient aid allocations. According to the prescriptive C-D selectivity approach, optimal aid allocation favours countries with high levels of poverty, low per capita incomes and sound policy regimes. Such allocations are considered poverty efficient by maximising the number of people pulled out of poverty. Countries with unsound policies regimes receive less aid in the C-D selectivity approach as these regimes lessen aid’s impact on growth and thus poverty reduction.

History

Journal

DAC journal

Volume

4

Pagination

27-40

Location

Paris, France

ISSN

1563-3152

Language

eng

Notes

Background Paper prepared for the Joint OECD DAC/Development Centre Experts’ Seminar, 10 March 2003

Publication classification

C1.1 Refereed article in a scholarly journal

Copyright notice

2003, OECD

Issue

3

Publisher

OECD

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