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The Implications of Horizontal Inequality for Aid

This paper argues that the reduction of horizontal inequalities (HIs) or inequalities between culturally defined groups should inform aid policy in heterogeneous countries with severe HIs. It shows how this would change aid allocation across countries, leading to more aid to heterogeneous countries relative to homogeneous ones, the opposite of the existing bias in aid distribution. It explores how adopting an HI approach would affect the use of particular aid instruments, arguing that different instruments are appropriate according to the attitude and capacity of the government in relation to correcting HIs. Drawing on case studies of Ghana and Nepal it argues that at present there is neglect of HI considerations in aid policy, which can be particularly damaging where aid forms a large part of government resources.
Publisher:
UNU-WIDER
Series:
WIDER Research Paper
Volume:
2007/51
Title:
The Implications of Horizontal Inequality for Aid
Authors:
Graham Brown, Frances Stewart, and Arnim Langer
Publication date:
September 2007
ISSN Web:
1810-2611
ISBN Web:
9291909963
ISBN 13 Web:
9789291909964
Copyright holder:
© UNU-WIDER
Copyright year:
2007
Keywords:
aid, horizontal inequality, social exclusion, Nepal, Ghana
JEL:
F35, D63
Project:
Conference on 'Aid: Principles, Policies and Performance'
Sponsor:
UNU-WIDER gratefully acknowledges the financial contribution to the conference by the Finnish Ministry for Foreign Affairs.
Format:
online
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