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30 Years of economics for development

Development Aid: A Fresh Look

Project name/title
Development Aid: A Fresh Look
Development and Finance
Development aid has become an increasingly hot topic in international research and policy circles, especially following inter alia the publication the World Bank’s Assessing Aid and the adoption of the Millennium Development Goals. The latter require large increases in aid flows to halve world poverty and hunger by 2015. Donors are paying increased attention to how they allocate aid across countries. Known as ‘aid selectivity’, this task is one of the most disputed areas of development policy and research. While there is now much agreement that aid promotes growth (and by implication reduces poverty), there is no agreement on the context in which aid produces growth. There are some who argue that aid effectiveness is conditional upon the policy regimes of recipient countries. Others argue that aid is effective irrespective of the recipient policy regime. Relatedly, our knowledge of the macro-economic effects of aid remains rudimentary, in particular how different types of aid affect key macroeconomic variables (the aid heterogeneity issue); and our understanding of the fiscal effects of aid remains incomplete (a deficiency now becoming acute as donors and governments struggle to fund pro-poor public spending). Also, the role of aid in strengthening the policy and institutional framework remains a research priority. Finally, the linkages between aid allocation, aid effectiveness and the achievement of the MDGs remain underdeveloped and need urgent clarification. Academic research on aid is vigorous, but it is often disconnected to the policy debates now going on within the donor community. Research by donors themselves is by its nature more policy-focused, but it is not necessarily objective; donors have an incentive to produce research which justifies their present and past patterns of aid allocation. What is needed is research that is rigorous, policy-focused, and independent of operational concerns. UNU-WIDER provides a good base for such research; the Institute is well-networked with both the international development community and with the academic research communities. Its independence on these issues has already enabled it to contribute effectively to the efforts of the OECD-DAC to build a consensus on the aid-selectivity issue, and it has excellent linkages with the Nordic aid agencies, DFID, and H.M. Treasury. The project aims to push development aid research into a number of radical, but extremely relevant new directions. Consisting of three linked activities, the project builds on expertise in aid and related areas of research among current WIDER resident researchers. WIDER possesses a very strong comparative advantage in this area, and is in a position to lead the development aid research effort internationally. It also builds on the many strategic contacts of the two project directors in policy and research circles.
David Fielding, University of Otago, New Zealand.
Jan-Erik Antipin, University of Tampere, Finland.
Gill Epstein, Bar-Ilan University, Israel.
Ira Gang, Rutgers University, USA.
Espen Villanger, Chr. Michelsen Institute, Bergen, Norway.
Simon Feeny, RMIT University, Australia.
Mansoob Murshed, Institute of Social Studies, The Hague, and Birmingham Business School.
Oliver Morrissey, University of Nottingham, U.K.
David Roodman, Center for Global Development, Washington D.C.
Robert Lensink, University of Groningen, Faculty of Economics, Groningen.
Niels Hermes, Department of Financial Management, Faculty of Management and Organization, University of Groningen.
Alessia Isopi, Tor Vergata, University of Rome.
Project Meetings
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