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Targeting Poverty
Authors:Peter G Warr
Institution:Division of Economics, Research School of Pacific and Asian Studies and Asia Pacific School of Economics and Management, The Australian National University
Abstract:Poverty reduction has been adopted as the official objective of many multilateral and bilateral development institutions. This paper argues that this focus needs to be clarified, especially the distinction between absolute and relative poverty. It argues that reduction of absolute poverty should be one of the objectives of foreign assistance, but not the sole objective. First, measures of absolute poverty are highly limited in scope. Second, the resources of foreign aid are fungible when recipient governments reallocate their own resources in response to the aid. Third, bilateral aid should reflect all the foreign policy objectives of the donor country.
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