Will Countries that Receive Insufficient Aid Please Stand Up?
The Accra Agenda for Action contains a commitment to increase aid effectiveness by 'addressing the issue of countries with insufficient aid.' This paper highlights the difficulties in identifying such countries unequivocally, given the li...
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/615621468331012215/Will-countries-with-insufficient-aid-please-stand-up http://hdl.handle.net/10986/27572 |
| Summary: | The Accra Agenda for Action contains a
commitment to increase aid effectiveness by 'addressing
the issue of countries with insufficient aid.' This
paper highlights the difficulties in identifying such
countries unequivocally, given the limited theoretical and
empirical knowledge on optimal aid allocations. Actual aid
receipts by low income countries are compared to several
benchmarks derived from different aid allocation models.
These models differ primarily with regard to the weights
assigned to country needs and performance. The analysis
shows that different aid allocation models identify
different sets of countries as receiving insufficient aid.
The paper does not find a greater tendency for fragile
states to receive insufficient aid compared to non-fragile
states. However, there appears a greater tendency for
bilateral aid to leave countries with insufficient aid
compared to multi-lateral aid, which in fact in many cases
partly compensates for under-funding from bilateral donors.
The potential aggregate cost of increasing aid to countries
with insufficient aid varies significantly depending on
which aid allocation model is used, but could be as high as
US$ 7 billion annually. Enhanced coordination of
donors' aid allocation decisions to ensure that no low
income country ends up inadvertently as an aid orphan will
be an important step in addressing 'the issue of
countries with insufficient aid.' |
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