The Evolution of Aid Conditionality: A Review of the Literature of the Last Twenty Years

Over time, the nature of conditionality has changed. Whereas in the past requirements were aimed at promoting economic growth in recipient countries, recent conditions have become more concerned with fulfilling either joint donor–recipient interests, or objectives more directly in the national interest of donor countries. The setting has also changed with the entry of new donors, that often come with a different perspective on conditionality and national sovereignty. The traditional donor countries’ scope for making demands decreases when recipient countries have more donors to turn to for aid.

This working paper presents a review of the academic literature on aid conditionality and its evolution, with a particular focus on the last twenty years. It looks at the nature, forms and objectives; the implementation; and the effectiveness of conditionality.