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Improving upon the World Bank’s Country Policy and Institutional Assessment: A New Performance Indicator Based on Aid Effectiveness

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  • Cagé Julia

    (Department of Economics, Sciences Po Paris, 28 rue des Saints-Pères, 75007 Paris, France)

Abstract

This article questions the relevance of the different measures of policy performance that are currently used by international organizations to allocate development aid. It evaluates more especially the pertinence of the World Bank’s Country Policy and Institutional Assessment (CPIA). Using a cross-country panel dataset over 146 countries between 1977 and 2008, I show that while the CPIA is correlated with current growth, it is not a good predictor for future growth. I then discuss the relevance of several instruments for aid allocation. In particular, I propose a performance indicator based on “aid effectiveness” to allocate aid selectively, and discuss a new way of assessing time-varying aid effectiveness.

Suggested Citation

  • Cagé Julia, 2014. "Improving upon the World Bank’s Country Policy and Institutional Assessment: A New Performance Indicator Based on Aid Effectiveness," Journal of Globalization and Development, De Gruyter, vol. 5(2), pages 213-233, December.
    • Handle: RePEc:bpj:globdv:v:5:y:2014:i:2:p:213-233:n:1
    DOI: 10.1515/jgd-2013-0007
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    More about this item

    Keywords

    conditionality; development aid allocation; performance criteria; selectivity; World Bank’s CPIA;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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