Aid Quality and Donor Rankings

This paper offers new measures of aid quality covering 38 bilateral and multilateral donors, as well as new insights about the robustness and usefulness of such measures. The 2005 Paris Declaration on Aid Effectiveness and the follow-up 2008 Accra Agenda for Action have focused attention on common donor practices that reduce the development impact of aid. Using 18 underlying indicators that capture these practices—derived from the OECD-DAC’s Survey for Monitoring the Paris Declaration, the new AidData database, and the DAC aid tables—the authors construct an overall aid quality index and four coherently defined sub-indexes on aid selectivity, alignment, harmonization, and specialization. Compared with earlier indicators used in donor rankings, this indicator set is more comprehensive and representative of the range of donor practices addressed in the Paris Declaration, improving the validity, reliability, and robustness of rankings. One of the innovations is to increase the validity of the aid quality indicators by adjusting for recipient characteristics, donor aid volumes, and other factors. Despite these improvements in data and methodology, the authors caution against overinterpretation of overall indexes such as these. Alternative plausible assumptions regarding weights or the inclusion of additional indicators can still produce marked shifts in the ranking of some donors, so that small differences in overall rankings are not meaningful. Moreover, because the performance of some donors varies considerably across the four sub-indexes, these sub-indexes may be more useful than the overall index in identifying donors’ relative strengths and weaknesses.     

Foreign Aid and Regime Change: A Role for Donor Intent

This paper uses data from the AidData project to analyze the association between foreign aid and the likelihood of democratization in aid recipients. Previous studies have argued that aid can entrench dictatorships, making a transition less likely. I find evidence that the relationship between aid and democratization depends on characteristics of the aid donor. During the period from 1992 to 2007, aid from democratic donors is often found to be associated with an increase in the likelihood of a democratic transition. This is consistent with a scenario in which aid promotes democratization and/or a situation in which democratic donors reward countries that take steps in a democratic direction. In either case, it suggests that democratic donors use scarce aid resources to encourage democracy. During the same period, aid from authoritarian donors exhibits a negative relationship with democratization. This suggests that the source of funding matters, with donor preferences regarding democracy helping to determine the link between aid and democratization.     

Rhetoric versus Reality: The Best and Worst of Aid Agency Practices

Foreign aid critics, supporters, recipients, and donors have produced eloquent rhetoric on the need for better aid practices—has this translated into reality? This paper attempts to monitor the best and worst of aid practices among bilateral, multilateral, and UN agencies. We create aid practice measures based on aid transparency, specialization, selectivity, ineffective aid channels, and overhead costs. We rate donor agencies from best to worst on aid practices. We find that the UK does well among bilateral agencies, the US is below average, and Scandinavian donors do surprisingly poorly. The biggest difference is between the UN agencies, who mostly rank in the bottom half of donors, and everyone else. Average performance of all agencies on transparency, fragmentation, and selectivity is still very poor. The paper also assesses trends in best practices over time—we find modest improvement in transparency and more in moving away from ineffective channels. However, we find no evidence of improvements (and partial evidence of worsening) in specialization, fragmentation, and selectivity, despite escalating rhetoric to the contrary.     

The Increasing Selectivity of Foreign Aid, 1984–2003

The Monterrey Consensus includes the idea that foreign aid is more effective when targeted to countries with sound institutions. We examine the extent to which foreign aid, bilateral and multilateral, is “selective” in terms of democracy and property rights/rule of law. We find that multilateral assistance is more selective than bilateral aid in targeting countries with good rule of law. “Selectivity” is a new phenomenon. During 1984–89, both bilateral and multilateral aid had significant negative relationships with rule of law; by 2000–03 this had shifted to a significant positive relationship for multilateral aid, and a positive but statistically insignificant relationship for bilateral aid.     

Throwing Foreign Aid at HIV/AIDS in Developing Countries: Missing the Target?

We assess empirically whether foreign official development assistance (ODA) has been effective in alleviating HIV/AIDS epidemics, which figures prominently among the Millennium Development Goals. We employ a difference-in-difference-in-differences approach to identify the treatment effect of ODA specifically meant to fight sexually transmitted diseases on HIV/AIDS-related outcome variables. We do not find that ODA has prevented new infections. The results regarding the medical care of infected people are mixed: evidence on significant treatment effects on AIDS-related deaths exists for the major bilateral source of ODA, the United States, in sharp contrast to ODA from multilateral organizations.     

The Localized Geography of Foreign Aid: A New Dataset and Application to Violent Armed Conflict

Existing foreign aid databases – the OECD’s CRS data and now AidData – are project-based. And yet nearly all empirical analyses using these data aggregate to the country-year level, thereby losing project-specific information. In this paper, we introduce new data on the geographic location of aid projects that have been committed to many African countries between 1989 and 2008. The data enable an examination of project-level information in a wider variety of systematic research contexts. To demonstrate the utility of the new data, we discuss how geographically disaggregated foreign aid and armed conflict data are needed to capture the theoretical mechanisms in the aid-conflict literature. We then map the disaggregated aid and conflict data in Sierra Leone, Angola, and Mozambique as specific examples of how these data could help disentangle competing causal mechanisms linking aid to conflict onset and dynamics. The research provides an important new perspective on the connections between aid and conflict. More generally, it is a crucial first step in geo-referencing and comparing foreign aid projects to various localized development outcomes.     

Foreign aid versus support to social entrepreneurs: Reviewing the way of fighting poverty in Zimbabwe

Despite the development interventions that have been adopted to help the countries caught in a downward spiral of impoverishment, their problems still persist. This paper focuses on the role that traditional foreign aid and the more recent bottom–up approach of supporting social entrepreneurs are playing to tackle the situation of extreme poverty in Zimbabwe. Drawing upon a narrative inquiry, 35 stories were collected to bring fresh insights regarding the realities of such interventions as they are experienced by the local people. The evidence shows the main shortcomings of the current development models and suggests that the improvement of a declining economy such as Zimbabwe would need the interaction of various factors, so that some interventions will appear significant only when the conditions of primary importance exist in the environment. Additionally, the engagement of local people seems to be a key aspect to the success of some of the support measures.     

外商直接投资与中国对外贸易发展的经验研究

文章基于1980-2004年中国经济时间序列数据,综合考察了外商直接投资对我国贸易总额、出口贸易额、进口贸易额的影响作用,并考虑了引资政策、贸易政策的变化对投资-贸易关系的结构冲击.