Does Aid Availability Affect Effectiveness in Reducing Poverty? A Review Article

François Bourguignon, Jean Philippe Platteau

Research output: Contribution to journalArticle

Abstract

This paper addresses the impact of aid supply on aid effectiveness. First, we review theoretical literature that deals with the problem of governance in donor-recipient relationships and are susceptible of highlighting effects of aggregate aid availability. Second, we provide a conceptual framework that explicitly incorporates a trade-off between considerations of needs and governance. We examine the impact of aid supply on the manner in which a donor agency allocates the available money between countries differing in terms of both needs and domestic governance. The central conclusion is that a donor's utility function that embodies the need-governance trade-off and the associated optimization mechanism yield a meaningful rule to guide inter-country allocation of aid resources.

Original languageEnglish
JournalWorld Development
DOIs
Publication statusAccepted/In press - 2015

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Keywords

  • Aid allocation
  • Aid effectiveness
  • Governance
  • Poverty reduction

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