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What is Behind Foreign Aid Ineffectiveness?

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  • Mohamed Mounir Sraieb

Abstract

Despite the highly significant flows involved, development aid has turned out to be ineffective in a large number of recipient countries. This paper 2 explores the reasons behind aid failure. It starts from an investigation of donors? motivations for aid allocation and examines their potential implications on aid policies. The main findings are that aid seems to be heavily impacted by inertia. Along with self-interest, this may explain the time-inconsistency problem facing aid donors. Next, the paper examines strategies toward mitigating such a time-inconsistency, including reputation signaling and changing aid modalities. This provides guidance on how aid should be optimally allocated among recipient countries.

Suggested Citation

  • Mohamed Mounir Sraieb, 2016. "What is Behind Foreign Aid Ineffectiveness?," Reflets et perspectives de la vie économique, De Boeck Université, vol. 0(2), pages 61-73.
    • Handle: RePEc:cai:rpvedb:rpve_552_0061
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    Cited by:

    1. Nimonka Bayale, 2018. "Aide et Croissance dans les pays de l’Union Economique et Monétaire Ouest Africaine (UEMOA) : retour sur une relation controversée," Working Papers hal-01765313, HAL.
    2. Nimonka Bayale, 2018. "Aide et Croissance dans les pays de l'Union Economique et Mon{\'e}taire Ouest Africaine (UEMOA) : retour sur une relation controvers{\'e}e," Papers 1805.00435, arXiv.org.
    3. BAYALE, Nimonka, 2018. "Quel volume d’aide internationale pour la croissance dans l’UEMOA ? [What amount of foreign aid for economic growth in WAEMU?]," MPRA Paper 88886, University Library of Munich, Germany, revised 07 Sep 2018.
    4. Nimonka Bayale & Kodjo Evlo & Fousseini Traore, 2018. "Foreign aid shocks and macroeconomic adjustment mechanisms in WAEMU countries : an approach based on a computable general equilibrium model (CGE) [Baisse de l’aide internationale et mécanismes d'aj," Working Papers hal-01865614, HAL.
    5. BAYALE, Nimonka & EVLO, Kodjo & TRAORE, Fousseini, 2018. "Foreign aid shocks and macroeconomic adjustment mechanisms in WAEMU countries : an approach based on a computable general equilibrium model," MPRA Paper 88466, University Library of Munich, Germany, revised 17 Aug 2018.

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