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Assessing Aid What Works, What Doesn’t, and Why. Development Research Group The World Bank. Policy Research Report. Official Development Assistance has declined by one-third. US dollars, billions. 75. 65. 55. ODA. 45. 1991. 1992. 1993. 1994. 1995. 1996. 1997. Assessing Aid.
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Assessing AidWhat Works, What Doesn’t, and Why Development Research Group The World Bank Policy Research Report
Official Development Assistance has declined by one-third US dollars, billions 75 65 55 ODA 45 1991 1992 1993 1994 1995 1996 1997
Assessing Aid • Money works - once countries reform • Ideas work better than money in generating reform improving public services
Poverty and Policy,113 Developing Countries, 1996 Poor Policy Good Policy High Poverty High Poverty II I III IV Good Policy Poor Policy Low Poverty Low Poverty
Poor Policy Good Policy High Poverty High Poverty II I III IV Good Policy Poor Policy Low Poverty Low Poverty Poverty and Policy,113 Developing Countries, 1996
Aid tapers out with reform… when ideally it should taper in Poverty - efficient allocation Current allocation Aid (percentage of GDP) Poor policy Mediocre Good policy
25 million people 7 million people Current allocation Poverty - efficient allocation $10 Billion in foreign aid could reduce poverty by:
IDA IDA and Optimal Aid Optimal aid Aid (percentage of GDP) Poor policy Mediocre Good policy
Policy index Policy Mediocre Poor Zambia: Aid and Policy Aid/GDP 12 Aid/GDP 10 8 6 4 2 0 1966-69 1970-73 1974-77 1978-81 1982-85 1986-89 1990-93
Assessing Aid • Money works - once countries reform • Ideas work better than money in generating reform
Policy index Good Policy Mediocre Aid/GDP Poor Vietnam: Aid and Policy Aid/GDP 4 3 2 1 0 1988 1989 1990 1991 1992 1993 1994 1995
Assessing Aid • Money works - once countries reform • Ideas work better than money in generating reform improving public services
One dollar in aid for rural development … raises rural development spending by 11 cents 11 cents $1
Success in rural water supply projects depends on whether donors promote beneficiary participation 62 60 Did donors promote participation? 40 Percent of projects successful 20 10 0 Yes No
Pakistan: School enrollment of 5-8 year old girls 100% 80% 70 60% 45 40% 20% 0 Balochistan program Pakistan average
Assessing Aid • Money works - once countries reform • Ideas work better than money in generating reform improving public services