Are public development banks counter-cyclical? A brief
October 20, 2020
Performance-based allocation (PBA) gives a dominant weight to the subjective assessment of the quality of economic policy and governance (through different composite indices) and a lower weight to the objective indicator of per capita income.
These subjective indices have been widely criticized, because they are neither a true measure of performance nor a robust element of aid effectiveness. Above all, they do not take sufficient account of the real needs of countries, particularly those facing structural handicaps.
FERDI has proposed introducing other criteria in addition to the traditional performance-based allocation indicators. These criteria are level of human capital, structural economic vulnerability, vulnerability to climate change, and the socio-political vulnerability reflected in internal violence and the risk of violence. This set of indicators makes it possible to take account of countries' needs, capacities, and the potential impact of aid.
These ideas are now at the heart of the concerns of the main multilateral donors who face the increasingly pressing issue of state fragility in the allocation of concessional aid funds.
FERDI, through its historical influence linked to this debate, now has an undeniable international reputation on these issues, which enables it to be regularly solicited for its expertise:
