Despite skepticism in the 1990s, the verdict on foreign aid is in and it is affirmative – aid can work. What’s more, the quantity of foreign aid has hit record levels, exceeding those envisioned in donor promises even with the onset of global economic crisis. But the crucial question of foreign aid allocation remains outstanding. What should be the objective of foreign aid, and which selectivity criteria should be adopted to meet this end?
Professor Patrick Guillaumont is one of the world’s experts on development economics, with a special interest in foreign aid allocation. He is author of several innovative papers, in which he challenges the paradigm currently dominating foreign aid. The prevailing thinking within governments and international organizations is that donor assistance should be targeted to poor countries with sound institutions and policies. Professor Guillaumont suggests an alternative paradigm. For the effectiveness of aid to be maximized, allocation must take into account the recipient’s vulnerability to external shocks. This event is an opportunity to hear Professor Guillaumont discuss why a country’s environment is important in assessing aid worthiness, and how aid criteria should be reformed to reflect vulnerability.