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The Effectiveness of Aid to Development. Focus on the Aid-Growth literature.

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par François Defourny
Facultés N-D de la Paix de Namur - Université Catholique de Louvain - Master in International and Development Economics 2005

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7.6. The detrimental consequences of the selectivity principle

The political recommendations of Burnside and Dollar (1997) may have harmful implications to the neediest populations. As expressed by Quibria (2004, p1 1), «Despite the putative merit of selectivity, its implications for equity in poor countries can be quite adverse.» In fact, there seems to be a high correlation between low income and poverty on the one hand and limited administrative and institutional capacities on the other. If aid resources are allocated only to countries that can design and implement «good» policies, this would exclude automatically some poorer countries which need foreign assistance the most. On the other hand, selectivity will favour allocation to very few large countries with relatively «good» policies and administrative capacities. In other words, selectivity would affect countries where aid can have the greatest impact in terms of equity.

More fundamentally, these results beg two important questions. On the one hand, we may wonder whether it is really appropriate to measure aid effectiveness through its impact on economic growth. On the other hand, is it really optimal to have different kinds of aids with different objectives?

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