Download e-book for iPad: Assessing Aid: What Works, What Doesn't and Why by World Bank

By World Bank

ISBN-10: 0195211235

ISBN-13: 9780195211238

Assessing reduction determines that the effectiveness of relief isn't really determined by way of the volume acquired yet fairly the institutional and coverage setting into which it truly is authorised. It examines how improvement counsel might be more suitable at lowering worldwide poverty and offers 5 major ideas for making reduction more desirable: concentrating on monetary reduction to terrible international locations with stable rules and robust financial administration; delivering policy-based relief to confirmed reformers; utilizing less complicated tools to move assets to international locations with sound administration; focusing tasks on growing and transmitting wisdom and means; and rethinking the interior incentives of relief enterprises.

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Extra info for Assessing Aid: What Works, What Doesn't and Why

Sample text

0 WHAT | g ,W Good Average Poor Economicmanagement In a poor-management country foreign aid may crowd out private investment: it may encourage the public sector to make commercial investments 2 | | X 2 that ___ would otherwise be undertaken by private investors. In a good-management country the effects of foreign aid would likely be magnified by crowding in private investment. There is evidence to support these notions (Dollar and Easterly 1998). 8). Thus the combination of good management and foreign aid is welcomed by the private sector, and this helps to explain the strong effect aid has on growth in such an environment.

Developmentagenciesworked with a "twogap" model that made imports and investment in physicalcapital the driving force of growth. The role of aid in promoting growthwas clear,since aid can help fillboth gaps. That is, from capitalto the underlying institutionsand policiesthat promote growth by encouraging efficient investment, by supporting human capital development,and by facilitatingtechnologicaladvance. What are the conclusionsof this new growth literature? A stable macroeconomicclimate is crucial.

Aid per capita (log scale in dollars) These findings for the effect of aid on growth and private investment shed some light on the problems of the Heavily Indebted Poor Countries Source: Dollar and Easterly 1995. 1). 14 15CI 400 1,100 3,000 Real GDP percapita (log scale) Source: Calculatedfrom Burnside-Dollardataset. 40 T'. ARGETING ASSISTANCE TO POOR COUNTRIES WITH SOUND institutions and policies will make the most of scarce aid resources to encourage investment, spur growth, and reduce poverty.

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Assessing Aid: What Works, What Doesn't and Why by World Bank


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