A Micro Level Analysis Of The Effects Of Aid Fragmentation And Aid Alignment

This book presents a set of practical steps related to harmonising donor practices that should significantly improve the effectiveness of development assistance.

This paper brings the aid effectiveness debate to the sub-national level. We hypothesize the nonrobust results regarding the effects of aid on development in the previous literature to arise due to the effects of aid being insufficiently large to measurably affect aggregate outcomes. Using geocoded data for World Bank aid to a maximum of 2,221 first-level administrative regions (ADM1) and 54,167 second-level administrative regions (ADM2) in 130 countries over the 2000-2011 period, we test whether aid affects development, measured as nighttime light growth. Our preferred identification strategy exploits variation arising from interacting a variable that indicates whether or not a country has passed the threshold for receiving IDA's concessional aid with a recipient region's probability to receive aid, in a sample of 478 ADM1 regions and almost 8,400 ADM2 regions from 21 countries. Controlling for the levels of the interacted variables, the interaction provides a powerful and excludable instrument. Overall, we find significant correlations between aid and growth in ADM2 regions, but no causal effects.

This edited volume provides an assessment of an increasingly fragmented aid system. Development cooperation is fundamentally changing its character in the wake of global economic and political transformations and an ongoing debate about what constitutes, and how best to achieve, global development. This also has important implications for the setup of the aid architecture. The increasing number of donors and other actors as well as goals and instruments has created an environment that is increasingly difficult to manoeuvre. Critics describe today's aid architecture as 'fragmented': inefficient, overly complex and rigid in adapting to the dynamic landscape of international cooperation. By analysing the actions of donors and new development actors, this book gives important insights into how and why the aid architecture has moved in this direction. The contributors also discuss the associated costs, but also potential benefits of a diverse aid system, and provide some concrete options for the way forward.

Provided for over 60 years, and expanding more rapidly today than it has for a generation, foreign aid is now a $100bn business. But does it work? Indeed, is it needed at all? In this first-ever, overall assessment of aid, Roger Riddell provides a rigorous but highly readable account of aid, warts and all.

Assessing Aid determines that the effectiveness of aid is not decided by the amount received but rather the institutional and policy environment into which it is accepted. It examines how development assistance can be more effective at reducing global poverty and gives five mainrecommendations for making aid more effective: targeting financial aid to poor countries with good policies and strong economic management; providing policy-based aid to demonstrated reformers; using simpler instruments to transfer resources to countries with sound management; focusing projects oncreating and transmitting knowledge and capacity; and rethinking the internal incentives of aid agencies.

This book is a resource for implementing the recommendations on civil society and aid effectiveness emerging from the Accra High Level Forum and its preparatory process.