Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/98206
Authors: 
Ranis, Gustav
Year of Publication: 
2012
Series/Report no.: 
Center Discussion Paper, Economic Growth Center 1015
Abstract: 
The discussion of the effectiveness of foreign aid has reached a high pitch. This paper assesses the sorry past and present key arguments for a potentially more effective and sustainable method of aid delivery. A key ingredient is to shake off the vestiges of structural adjustment and move towards true recipient country ownership complete with 'self-conditionality' with aid recipients formulating their own reform packages. This means donors become much more passive, act like a bank and respond to proposals which concentrate on a few critical areas over a three to five-year period. Policy-based program lending should respond to packages put together by the main domestic stakeholders with the help, if necessary, of independent third parties. There should be no compulsion to lend; indeed, an aid hiatus is an indication that the new system is effective. What is required is for donors to stop using aid as a short-term foreign policy tool and for recipients to accept the notion that aid provides the opportunity to reduce the inevitable adjustment pains caused by real reforms.
Subjects: 
Foreign aid
self-conditionality
program lending
new donors
Foreign aid
self-conditionality
program lending
new donors
JEL: 
O11
O20
O38
P45
Document Type: 
Working Paper

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