Empirical Evidence on the New International Aid Architecture
IMF Working Papers, December 1, 2007
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- Empirical Evidence on the New International Aid Architecture
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Bibliographic details
- Authors: Danny Cassimon, Stijn Claessens, Bjorn Van Campenhout
- Published: December 1, 2007
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451868401.001
Summary and main findings
- Study scope: analysis of how 22 donors allocate their bilateral aid among 147 recipient countries over the 1970- 2004 period.
- Primary finding: after the fall of the Berlin wall, and especially in the late nineties, bilateral aid responds more to economic need and the quality of a recipient country's policy and institutional environment and less to debt, size, and colonial linkages.
- Debt and defensive lending: when a country uses a PRSP and passes the HIPC decision point the perverse effect of large bilateral and multilateral debt shares on aid flows is reduced, suggesting less defensive lending.
- Overall assessment: international aid architecture changes have led to more selectivity in aid allocations.
- Uncertainties: the specific factors causing these changes remain unclear.
- Heterogeneity across donors: large differences among donors in selectivity remain and appear to relate to donors' own institutional environments.
- Policy implication: further reforms will have to be multifaceted.
Policy-relevant observations and implications
- Increased selectivity suggests donors place greater weight on:
- economic need, and
- quality of recipient policy and institutional environment.
- Reduced defensive lending associated with:
- recipient use of a PRSP, and
- passing the HIPC decision point.
- Reform design implication: because donor behavior differs and appears linked to donor institutional environments, reforms aiming to further improve aid allocation should be multifaceted and address donor-side institutions as well as recipient incentives.
Data, scope, and methodological notes
- Donors analyzed: 22.
- Recipients analyzed: 147.
- Time period covered: 1970- 2004.
- Document length: 53 pages.
- Publication series and identifiers:
- Series: Working Paper No. 2007/277
- Issue: 277
- Volume: 2007
- DOI: https://doi.org/10.5089/9781451868401.001
- Stock No: WPIEA2007277
- ISBN: 9781451868401
- ISSN: 1018-5941
- Authors: Danny Cassimon, Stijn Claessens, Bjorn Van Campenhout
- Publication date: December 1, 2007
Subject classification and keywords
- Subject: Aid flows, Debt reduction, Debt relief, Foreign aid, Public and publicly-guaranteed external debt
- Keywords: country combination, country export, country trade, donor country, recipient country, WP
Source: IMF Working Papers — "Empirical Evidence on the New International Aid Architecture", Danny Cassimon, Stijn Claessens, and Bjorn Van Campenhout, December 1, 2007.