An overview of aid effectiveness, determinants and strategies

This paper provides an overview of issues relating to aid effectiveness. It argues that it is impossible to give a definitive answer to the question of whether aid is effective, and that it is more useful to ask what can be done to make aid more effective. The paper then groups the various determinants of aid effectiveness, as well as strategies to improve effectiveness, under three headings: the performance of the recipient (developing) country government; the performance of the aid agency of the donor (developed) country; and the interaction between the two. This provides, it is argued, a useful framework within which to understand different and competing arguments about how to improve aid effectiveness.aid, aid effectiveness

Australian aid to Afghanistan: submission to the foreign affairs, defence and trade reference committee

This submission is written by Professor Stephen Howes, Director of the Development Policy Centre and Mr Jonathan Pryke a researcher at the Centre. Professor Howes has twenty-five years of experience working in and on aid and development in the AsiaPacific region. Formerly Lead Economist for India with the World Bank and Chief Economist with AusAID, he was a lead author of the Core Group Report on Aid Effectiveness (2006), the review of Australian aid to PNG (2010) and the Independent Review of Aid Effectiveness (2012). He currently serves on the Board of CARE Australia. Jonathan Pryke graduated from the ANU in 2011 with a Masters in Public Policy and Masters in Diplomacy. Ms Alicia Mollaun also contributed to this submission via the provision of a literature survey. Ms Mollaun is a PhD student at the Crawford School working on American aid to Pakistan. She has worked for the Australian Government with PM&C and DFAT, and is currently on leave from DFAT

Asia’s Wicked Environmental Problems

The developing economies of Asia are confronted by serious environmental problems that threaten to undermine future growth, food security, and regional stability. This study considers four major environmental challenges that policymakers across developing Asia will need to address towards 2030: water management, air pollution, deforestation and land degradation, and climate change. We argue that these challenges, each unique in their own way, all exhibit the characteristics of “wicked problems”. As developed in the planning literature, and now applied much more broadly, wicked problems are dynamic, complex, encompass many issues and stakeholders, and evade straightforward, lasting solutions.asia environmental problems; food security; water management; air pollution; deforestation; land degradation; climate change; wicked problems

Does the World Bank have a micro-macro paradox or do the data deceive?

In 1986, Mosely first drew attention to an apparent paradox in the performance of international aid. Microeconomic data from evaluations of aid financed projects showed a majority of projects were successful, whereas macroeconomic data from regressions of aid on growth were discouraging. The paradox, if real, implied that the aggregate impact of aid was less the sum of its parts. Mosely asked whether the paradox was real of whether the “data deceived.” This question, which has come to be equated with the issue of whether aid works, has been the subject of numerous cross-country regressions to test whether aid has an impact on growth (or related variables). But the regression results have been inconclusive, and the methodology has come under attack. Evidence from case studies offers an alternative test. One prominent case study approach is that of Picciotto (2009), which claims to find strong evidence for the existence of the paradox, namely the fact that one third of World Bank country assistance program evaluations show success at the project (micro) level but not at the country (macro) level. This paper re-evaluates Piciotto’s claimed findings.aid, aid effectiveness, world bank

Expenditure implications of India's state-level fiscal crisis

Indias states have significant developmental expenditure responsibilities. While the fiscal crisis which engulfed Indias states in the late nineties led to higher deficits and debt levels, it was also associated with a rapid increase in expenditure levels, and it might be thought that this would have increased the development effectiveness of the state governments. However, a closer look at the data reveals that this is not the case. The main positive fiscal development in the post 1996/97 period is a pick up in real growth in government capital expenditure. In other respects, the fiscal crisis weakened the developmental and poverty impact of state governments especially in the poor states. Real growth of expenditure in health and education slowed, in some cases halted, and the efficiency of government expenditure fell as liquidity constraints tightened and non-salary expenditures were crowded out

A framework for a post-2012 global climate agreement

Global greenhouse gas emissions are on a steeper growth trajectory than assumed in most scenarios that underlie current international policy discussions and negotiations. Effective global climate change mitigation action will require speed, depth and breadth well beyond any efforts seen to date, and will need to involve all major emitters, including developing countries (Garnaut et al., 2008). To achieve a comprehensive global agreement at or after the Copenhagen climate conference, a principles-based framework for mitigation is needed. Here we outline a system that adds up to a global solution, and that could be broadly acceptable. It involves internationally tradable emissions rights allocated across countries, with allocations moving over time to equal per capita allocations. Developing countries would receive increasing emissions entitlements, linked to their GDP growth, for a transitional period. Binding emissions targets would apply to all developed and high-income countries plus China from the outset

Income distribution: Measurement, transition and analysis of urban China, 1981-1990.

Many aspects of economic analysis require judgements to be made about distributions. When agreement on a single criterion for judgement is not possible, it is necessary to examine whether one distribution is better than another from a number of perspectives. The problem of 'distributional dominance', which Part One addresses, is precisely this problem of ordering two distributions in relation to one or more objective functions, via use of a single 'dominance criterion'. Four themes are pursued. It is argued that welfare, poverty and inequality dominance criteria can be fruitfully analyzed within a single framework. The need to approach the problem of distributional dominance as a statistical one is stressed. Estimators and a method of inference are proposed and are themselves tested via a simulation study. The likely effect of aggregation on the attained ordering of distributions is assessed, also via a simulation study. A critical re-appraisal is presented of the most widely-used dominance criterion, second-order stochastic dominance, and alternative criteria are proposed. The usefulness of thinking of dominance criteria in terms of curves within bounds is emphasized. Part Two of the thesis is a study of the distribution of income in urban China in the eighties, using both aggregated, nationwide data and disaggregated data for two provinces. This study is both an application of the methods developed in Part One and a case-study of the dynamics of income distribution in a transitional economy. Evidence is found that cash-income inequality has grown over the decade, and this is linked to the reform process. However, inequality remains exceptionally low by international standards. Moreover, both the system of price subsidies and that of cash compensation introduced to replace the subsidies are shown to have exerted an equalizing influence on the urban distribution of income