Workshop on how to take vulnerabilities into account for the allocation of concessional funds.

On Friday, March 8, Patrick Guillaumont and Laurent Wagner presented at the African Development Bank's headquarters in Abidjan the conclusions of a study conducted by Ferdi at the request of the African Development Bank on how to take vulnerabilities into account for the allocation of concessional funds.
The debate on the criteria for allocating aid is based on the search for a balance between the needs of countries and the potential effectiveness of aid. Performance-based allocation gives weight to the subjective assessment of the quality of economic policy and governance (through different composite indices) and a very low weight to the objective indicator of needs. These subjective indices have been widely criticized as they do not correspond to either a real measure of performance or a robust element of aid effectiveness. Above all, they do not sufficiently take into account the real needs of countries, especially those resulting from the structural handicaps that they face.

As a result, Ferdi proposed to introduce other criteria alongside traditional indicators of performance-based allocation formulae, such as low human capital, structural economic vulnerability, and vulnerability to climate change, internal violence and the risks of violence in the countries. This set of indicators makes it possible to take into account country needs, their capacities and the potential impact of aid. These ideas are now central to the concerns of major multilateral donors facing the increasingly pressing issue of State Fragility for the allocation of concessional funds.