Ideas to Action:

Independent research for global prosperity

Research Seminar Series (RSS)

Foreign Aid Effectiveness and Selectivity: New Results

Tuesday, April 13, 2004 - 12:00pm to 2:00pm

David Dollar will present the results of two new research papers, with discussion from Nicholas Eberstadt.

The first, "Aid, Policies, and Growth: Revisiting the Evidence" (with Craig Burnside) revisits the relationship between aid and growth using a new data set focusing on the 1990s. The evidence supports the view that the impact of aid depends on the quality of state institutions and policies. There is no support for the competing hypothesis that aid has the same positive effect everywhere. The authors show that in the 1990s the allocation of aid to low-income countries favored ones with better institutional quality.

The second paper, "The Increasing Selectivity of Foreign Aid, 1984-2002" (with Victoria Levin) examines the allocation of foreign aid by 41 different donor agencies. The main finding is that the same group of multilateral and bilateral aid agencies that are very policy focused, are also very poverty focused. Some donors that are largest in absolute size, such as France and the United States, are not particularly selective. Japan comes in high on the policy selectivity index but far down on the poverty selectivity index, reflecting its pattern of giving large amounts of aid in Asia to countries that are well governed but in many cases not poor.

Nicholas Eberstadts Presentation (PDF)

This event is co-hosted by MADS and GLIG*

*The Massachusetts Avenue Development Seminar (MADS) series is an effort by the Center for Global Development and The Paul H Nitze School of Advanced International Studies to take advantage of the incredible concentration of great international development scholars in the Metro Washington, DC area. The series seeks to bring together members of this community and improve communication between them.

* The Globalization and Inequality Group (GLIG) is a by invitation-only working group on globalization and inequality hosted jointly by the Brookings Institution and the Center for Global Development. Chaired by Nancy Birdsall, President of CGD, and Carol Graham, Vice President and Director of Governance Studies <

http://www.brookings.edu/gs/gs_hp.htm> at the Brookings Institution, it is an ongoing effort, serving as both a forum for the discussion of new research on the topic, as well as a means to inform the debate in the longer term.