An Index of Donor Performance

The Commitment to Development Index of the Center for Global Development rates 21 rich countries on the “development-friendliness” of their policies. It is revised and updated annually. In the 2004 edition, the component on foreign assistance combines quantitative and qualitative measures of official aid, and of fiscal policies that support private charitable giving. The quantitative measure uses a net transfers con- cept, as distinct from the net flows concept in the net Official Development Assistance measure of the Development Assistance Committee, which does not net out interest received. The qualitative factors are three: a penalty for tying aid; a discounting system that favors aid to poorer, better-governed recipients; and a penalty for “project proliferation.” The selectivity weighting approach avoids some conceptual problems inherent in the Dollar and Levin (2004) elasticity- based method. The proliferation pen-alty derives from a calibrated model of aid transaction cost developed in Roodman (forthcoming). The charitable giving measure is based on an estimate of the share of observed private giving to developing countries that is attributable to a) lower overall taxes (income effect) and b) specific tax incentives for giving (price effect). Despite the adjustments, overall results are dominated by differences in quantity of official aid given. This is because while there is a seven-fold range in net concessional transfers/GDP among the score countries, variation in overall aid quality across donors appears far lower, and private giving is generally small. Denmark, the Netherlands, Norway, and Sweden score highest while the largest donors in absolute terms, the United States and Japan, score in the bottom third. Standings by the 2004 methodology have been relatively stable since 1995.foreign aid, selectivity, performance measurement

Measuring aid flows : a new approach

Debate about the effectiveness of foreign aid has intensified in recent years, as budgetary pressures on aid have increased in donor countries. Whatever the merits of opposing arguments, the question is: do conventional measures of aid (such as OECD's Net ODA), which lump together grants and loans, accurately reflect true aid flows? The authors analyze the methodological shortcomings of conventional measures of aid and propose a new approach, which measures official aid flows as the sum of grants and the grant-equivalents of official loans (in a new aggregate they call"Effective Development Assistance,"or EDA). They show how results using this conceptually superior measure may differ significantly from conventional aggregates, providing a quite different view on major aid trends. They implement their approach empirically using data on some 40,000 official loans from the World Bank's DRS database--virtually all of the official loans to 133 developing countries from 1975 to 1995. The numerical results underscore several points: 1) The conventional approach has led to systematic overestimates of the concessionality of official loans. This overestimate has increased significantly since the mid-1980s. Conventional methods show a rising trend; the new method shows the opposite. 2) Net ODA increasingly overstates the true aid content of official flows, although the divergence between the two approaches is somewhat muted by the rising relative importance of grants over loans in total official flows.Strategic Debt Management,Economic Adjustment and Lending,Banks&Banking Reform,Payment Systems&Infrastructure,Economic Theory&Research,Economic Adjustment and Lending,Banks&Banking Reform,Strategic Debt Management,Economic Theory&Research,Payment Systems&Infrastructure

Consequences of Debt Relief Initiatives in the 1990s

In this paper I investigate the effects of recent debt relief initiatives such as the Heavily Indebted Poor Countries (HIPC) Debt Initiative of 1996 on resource flows to developing countries. Focusing on a sample of low-income countries, I concentrate on the following questions. First, is the HIPC initiative selective in the sense of “rewarding” improved policies in HIPC countries with higher transfers? Measuring improvement directly with dummy variables representing progress in the initiative, I find that good macroeconomic management does not seem to matter in terms of the level of resource transfers and foreign aid received by a HIPC country. Second, have HIPCs and non-HIPCs experienced reductions in aid inflows (other than debt relief) in the 1990s and early 2000s? My estimates suggest that countries classified as HIPCs received higher (official and aggregate) net transfers than non- HIPC countries in the first half of the 1990s. These differences persist after 1996, however, at a lower level. Looking at net official development assistance, differences between HIPC countries and non-HIPC countries persist throughout the 1990s and early 2000s, with higher levels of aid going to HIPC countries. Third, have the debt relief initiatives in the 1990s provided additional resources to low-income countries? Confirming findings in earlier literature, my results suggest that aid flows have not changed significantly in response to debt relief.HIPC debt initiative, foreign aid, selectivity, additionality

When does more aid imply less democracy? An empirical examination

Foreign aid flows have increased considerably during the last decades, targeting, apart from development objectives, goals related to democracy. In this paper we investigate whether aid has affected the political regime of recipient countries. To this end, we use annual data on Net Official Development Assistance covering 64 aid-recipients. Because of data limitations, we cover the period 1967-2002. We find that aid flows decreased the likelihood of observing a democratic regime in a recipient country. This effect is sensitive to economic and social conditions. The negative relation between aid and democracy is moderated when aid flows are preceded by economic liberalization. Aid from the U.S. has a non-significant effect on the political regime of recipients.democratization; foreign aid; binary model; endogeneity

Remittances and their microeconomic impacts: evidence from Latin America

The flow of remittances to Latin American and Caribbean countries is the highest and fastest growing in the world, exceeding foreign direct investment and net official development assistance to the region. Remittances surpass tourism income and almost always exceed revenues from the largest export in these countries, accounting for at least 10 percent of gross domestic product in six of them. Furthermore, remittances are the least volatile source of foreign exchange in many of these economies, thus playing a crucial role in economic development. ; In what follows, I provide a general overview of the remitting patterns of migrants to the U.S. who are from Costa Rica, the Dominican Republic, Haiti, Mexico, Nicaragua, and Peru. Subsequently, I summarize some microeconomic evidence of the impact that remittances have on various spheres of economic development, as is the case with employment, business ownership, education, and health care investments in two LAC economies. These findings underscore the importance of remittances as a resource for the accumulation of human capital investments in education and health and as a determinant of employment patterns in remittance-receiving households in developing economies.Emigration and immigration ; Economic development ; Developing countries ; Emigrant remittances

The Impact of Aid on the Economic Growth of Developing Countries (LDCs) in Sub-Saharan Africa

Least Developed Countries (LDCs) of Sub-Saharan African have been recipients of official development assistance for more than 5 decades; however they are still characterized by chronic problems of poverty, low living standards and weak economic growth. The hot question is: Is aid effective in promoting economic growth? Thus, this paper investigates the impact of aid on the economic growth of 12 least developed countries in Sub-Saharan Africa over a period of 20 years. I take a fixed effects instrumental variable approach and the results imply that aid has a statistically insignificant negative impact on economic growth. I therefore conclude that aid is ineffective in promoting growth, perhaps due to misallocation of aid or inefficient use

Transformations to achieve the Sustainable Development Goals Includes the SDG Index and Dashboards. Sustainable Development Report 2019

The Sustainable Development Report 2019 presents an updated SDG Index and Dashboards with a refined assessment of countries’ distance to SDG targets. The report has been successfully audited for the first time by the European Commission Joint Research Centre. New indicators have been included, primarily to refine the indicator selection on agriculture, diets, gender equality and freedom of speech. We have also added more metrics for international spillovers, including on fatal work accidents. A new website and data visualization tools are available (http://sustainabledevelopment.report). Once again, Nordic countries – Denmark, Sweden and Finland – top the SDG Index. Yet, even these countries face major challenges in implementing one or several SDGs. No country is on track for achieving all 17 goals with major performance gaps even in the top countries on SDG 12 (Responsible Consumption and Production), SDG 13 (Climate Action), SDG 14 (Life Below Water) and SDG 15 (Life on Land). Income and wealth inequalities, as well as gaps in health and education outcomes by population groups also remain important policy challenges in developing and developed countries alike. The Sustainable Development Report 2019 generates seven major findings: 1. High-level political commitment to the SDGs is falling short of historic promises In September 2019, heads-of-states and governments will convene for the first time in person at the UN in New York to review progress on their promises made four years after the adoption of the 2030 Agenda. Yet, our in-depth analyses show that many have not taken the critical steps to implement the SDGs. Out of 43 countries surveyed on SDG implementation efforts, including all G20 countries and countries with a population greater than 100 million, 33 countries have endorsed the SDGs in official statements since January 1st, 2018. Yet in only 18 of them do central budget documents mention the SDGs. This gap between rhetoric and action must be closed. 2. The SDGs can be operationalized through six SDG Transformations SDG implementation can be organized along the following Transformations: 1. Education, Gender, and Inequality; 2. Health, Wellbeing, and Demography; 3. Energy Decarbonization and Sustainable Industry; 4. Sustainable Food, Land, Water, Oceans; 5. Sustainable Cities and Communities; and 6. Digital Revolution for Sustainable Development. The transformations respect strong interdependencies across the SDGs and can be operationalized by well-defined parts of governments in collaboration with civil society, business, and other stakeholders. They must be underpinned and guided by the principles of Leave No One Behind and Circularity and Decoupling of resource use from human wellbeing. 3. Trends on climate (SDG 13) and biodiversity (SDG 14 and SDG 15) are alarming On average, countries obtain their worst scores on SDG 13 (Climate Action), SDG 14 (Life Below Water) and SDG 15 (Life on Land). No country obtains a “green rating” (synonym of SDG achieved) on SDG 14 (Life Below Water). Trends on greenhouse gas emissions and, even more so, on threatened species are moving in the wrong direction. These findings are in line with the recent reports from the IPCC and IPBES on climate change mitigation and biodiversity protection, respectively. 4. Sustainable land-use and healthy diets require integrated agriculture, climate and health policy interventions Land use and food production are not meeting people’s needs. Agriculture destroys forests and biodiversity, squanders water and releases one-quarter of global greenhouse-gas emissions. In total, 78% of world nations for which data are available obtain a “red rating” (synonym of major SDG challenge) on sustainable nitrogen management; the highest number of “red” rating across all indicators included in the report. At the same time, one-third of food is wasted, 800 million people remain undernourished, 2 billion are deficient in micronutrients, and obesity is on the rise. New indicators on nations’ trophic level and yield gap closure highlight the depth of the challenge. Transformations towards sustainable landuse and food systems are required to balance efficient and resilient agriculture and forestry with biodiversity conservation and restoration as well as healthy diets

Workfare in the undemocratic states: the case of China

This article examines the problems caused by workfare in China. It is found that China’s public assistance scheme is managed mainly by volunteers and government officials who do not necessarily possess relevant qualifications. Also, welfare claimants’ benefits can be ceased without going through a rigorous procedure; they can hardly challenge the decisions of the authority because China’s judicial system is interfered by central and local senior officials. This article concludes that workfare is a product of Western democratic countries; its implementation in undemocratic states will only increase power abuses among welfare bureaucrats and threaten the rights of claimants. </jats:p

The Measure of Poverty: A Boston Indicators Project Special Report

Examines Boston's poverty rate by race/ethnicity, family structure, education, and geography; income inequality; demand for safety-net programs; and how the high cost of living and budget cuts affect vulnerable households and those below the poverty line

Russia and the IMF: pseudo lending for pseudo reforms

This paper argues that the IMF financial and good technical assistance to Russia in the 1990s has been less than generous. Not only the size of the assistance might have not been adequate but also the timing and actual disbursements of these funds were in sharp discord with pledges. More importantly, the IMF made a number of serious policy mistakes in both design and the implementation of the reforms, which significantly contributed to a delay in stabilisation of the economy and were thus costly in terms of the loss of welfare to the society