Effectiveness of financing flows for development

Effectiveness of financing flows for development
FERDI examines how external financing can effectively contribute to the sustainability of economic growth and the reduction of vulnerabilities, especially for the poorest countries.

A central theme of its historical activity, FERDI continues its work on the effectiveness of financing flows on development, in particular international aid, examined in different aspects such as its impact on growth, income inequality, and poverty, the effects of vertical funds, aid for trade, or aid to "fragile states", and aid to the least developed countries (LDCs).

FERDI's work shows that aid effectiveness does not solely depend on the quality of the policies and institutions of recipient countries.

The determinants of aid effectiveness are multiple, and complex to analyze. The literature, to which FERDI's work has contributed, shows that aid effectiveness does not depend solely on the quality of recipient countries' policies and institutions. 

FERDI is particularly interested in the ability of aid to cushion shocks. A renewal of the debate is now possible with the emergence of extremely detailed databases for geo-located disbursed aid. The combination of satellite resources and Big Data provides a new and important research resource on which several studies are being undertaken.

Results and Impact

Aid, an inequality reducing factor

The article published in Review of World Economics "Volatility widens inequality. Could aid and remittances help" (co-authored by Lisa Chauvet, Marin Ferry, Patrick Guillaumont, Sylviane Guillaumont Jeanneney, Sampawende J.-A. Tapsoba, Laurent Wagner) highlighted how aid can reduce inequality by reducing macroeconomic instability. This publication is based on work carried out as part of the project "Financial Volatility and Growth in Low Income Countries".

An original survey on the influence of Christian thought in development cooperation

The book written by Sylviane Guillaumont Jeanneney L'aide au développement sous un regard chrétien [Aid for Development, from a Christian viewpoint], published in 2019, offers an original survey of the messages and influence of Christian thinking on development cooperation policies and their effectiveness. In particular, it highlights the need to place ethics at the heart of development actions if it is to effectively pursue its fundamental objectives.

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