Adapting Aid Allocation Criteria to Development Goals

Abstract

This paper analyzes aid allocation from a normative point of view. It attempts to design aid allocation criteria adapted to development goals and combining the principles of effectiveness and equity in a transparent and integrated framework. The common view about aid selectivity, which essentially refers to the quality of governance and policy indicators, is challenged for several reasons, in particular the weakness of the relationship between these indicators and aid effectiveness and the risk of countries facing exogeneous difficulties being left behind. Consistent with the lessons of the literature on aid effectiveness, new criteria for aid allocation are proposed, in particular that of structural vulnerability which has been shown to increase the marginal effectiveness of aid, because aid dampens its negative effects.Also available on the website of UN ECOSOC.
Citation

Guillaumont, P. "Adapting Aid Allocation Criteria to Development Goals" Ferdi, Working paper P01, May 2008