IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v90y2017icp27-40.html
   My bibliography  Save this article

How to Take into Account Vulnerability in Aid Allocation Criteria and Lack of Human Capital as Well: Improving the Performance Based Allocation

Author

Listed:
  • Guillaumont, Patrick
  • Guillaumont Jeanneney, Sylviane
  • Wagner, Laurent

Abstract

This paper considers why and how the Performance Based Allocation (PBA) used in multilateral development banks and in particular at IDA, could be improved by taking the structural handicaps of eligible countries into account. The PBA relies on a debatable definition of performance. It does not meet the equity concern raised by the existence of structural handicaps to growth. It neglects the lessons of the aid effectiveness literature. Finally, it suffers from some opacity. We show how it is possible to increase the share of specific groups of countries, such as Sub-Saharan Africa or post-conflict states, in a transparent manner.

Suggested Citation

  • Guillaumont, Patrick & Guillaumont Jeanneney, Sylviane & Wagner, Laurent, 2017. "How to Take into Account Vulnerability in Aid Allocation Criteria and Lack of Human Capital as Well: Improving the Performance Based Allocation," World Development, Elsevier, vol. 90(C), pages 27-40.
    • Handle: RePEc:eee:wdevel:v:90:y:2017:i:c:p:27-40
    DOI: 10.1016/j.worlddev.2015.10.045
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X15002740
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.worlddev.2015.10.045?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ramey, Garey & Ramey, Valerie A, 1995. "Cross-Country Evidence on the Link between Volatility and Growth," American Economic Review, American Economic Association, vol. 85(5), pages 1138-1151, December.
    2. Jacky Amprou & Patrick Guillaumont & Sylviane Guillaumont Jeanneney, 2007. "Aid Selectivity According to Augmented Criteria," The World Economy, Wiley Blackwell, vol. 30(5), pages 733-763, May.
    3. Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY, 2009. "Accounting for Vulnerability of African Countries in Performance Based Aid Allocation," Working Papers P08, FERDI.
    4. Paul Collier, 2012. "How To Spend It: The Organization of Public Spending and Aid Effectiveness," WIDER Working Paper Series wp-2012-005, World Institute for Development Economic Research (UNU-WIDER).
    5. Lisa Chauvet & Patrick Guillaumont, 2009. "Aid, Volatility, and Growth Again: When Aid Volatility Matters and When it Does Not," Review of Development Economics, Wiley Blackwell, vol. 13(3), pages 452-463, August.
    6. Patrick GUILLAUMONT, 2008. "Adapting Aid Allocation Criteria to Development Goals," Working Papers P01, FERDI.
    7. David Fielding & George Mavrotas, 2008. "Aid Volatility and Donor–Recipient Characteristics in ‘Difficult Partnership Countries’," Economica, London School of Economics and Political Science, vol. 75(299), pages 481-494, August.
    8. Laurent Wagner, 2007. "Thresholds in Aid Effectiveness," Post-Print hal-00177460, HAL.
    9. David Roodman, 2007. "The Anarchy of Numbers: Aid, Development, and Cross-Country Empirics," The World Bank Economic Review, World Bank, vol. 21(2), pages 255-277, May.
    10. Patrick GUILLAUMONT & Mark McGILLIVRAY & Laurent WAGNER, 2013. "Performance Assessment: How it Depends on Structural Economic Vulnerabilty and Human Capital. Implications for the Allocation of Aid," Working Papers P71, FERDI.
    11. Patrick Guillaumont, 2009. "An Economic Vulnerability Index: Its Design and Use for International Development Policy," Post-Print hal-00416800, HAL.
    12. Paul Collier & Benedikt Goderis, 2007. "Does aid mitigate external shocks?," CSAE Working Paper Series 2007-18, Centre for the Study of African Economies, University of Oxford.
    13. repec:bla:rdevec:v:13:y:2009:i:s1:p:429-451 is not listed on IDEAS
    14. Hudson, John, 2015. "Consequences of Aid Volatility for Macroeconomic Management and Aid Effectiveness," World Development, Elsevier, vol. 69(C), pages 62-74.
    15. Lisa CHAUVET & Patrick GUILLAUMONT, 2003. "Aid and Growth Revisited: Policy, Economic Vulnerability and Political Instability," Working Papers 200327, CERDI.
    16. Bulír, Ales & Hamann, A. Javier, 2008. "Volatility of Development Aid: From the Frying Pan into the Fire?," World Development, Elsevier, vol. 36(10), pages 2048-2066, October.
    17. P. Guillaumont & L. Chauvet, 2001. "Aid and Performance: A Reassessment," Journal of Development Studies, Taylor & Francis Journals, vol. 37(6), pages 66-92.
    18. Akramov, Kamiljon T., 2012. "Foreign aid allocation, governance, and economic growth," IFPRI books, International Food Policy Research Institute (IFPRI), number Kamiljon Akramov.
    19. Patrick Guillaumont, 2009. "An Economic Vulnerability Index: Its Design and Use for International Development Policy," Oxford Development Studies, Taylor & Francis Journals, vol. 37(3), pages 193-228.
    20. Patrick Guillaumont & Sylviane Guillaumont Jeanneney & Désiré Vencatachellum, 2009. "Accounting for Vulnerability of African Countries in Performance Based Aid Allocation," Post-Print hal-00444193, HAL.
    21. Kanbur, Ravi, 2011. "Poor Countries or Poor People? Development Assistance and the New Geography of Global Poverty," CEPR Discussion Papers 8489, C.E.P.R. Discussion Papers.
    22. Akramov, Kamiljon T., 2012. "Foreign aid allocation, governance, and economic growth:," Issue briefs 72, International Food Policy Research Institute (IFPRI).
    23. Benjamin Leo, 2010. "Leveraging World Bank Resources for the Poorest: IDA Blended Financing Facility Proposal - Working Paper 214," Working Papers 214, Center for Global Development.
    24. Kodama, Masahiro, 2012. "Aid Unpredictability and Economic Growth," World Development, Elsevier, vol. 40(2), pages 266-272.
    25. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, vol. 64(2), pages 547-570, April.
    26. Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY, 2014. "For a new instrument supporting regional integration in Africa to be implemented by the African Development Bank," Working Papers P83, FERDI.
    27. William Easterly & Ross Levine & David Roodman, 2004. "Aid, Policies, and Growth: Comment," American Economic Review, American Economic Association, vol. 94(3), pages 774-780, June.
    28. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
    29. Paul Collier & Benedikt Goderis, 2009. "Does Aid Mitigate External Shocks?," Review of Development Economics, Wiley Blackwell, vol. 13(3), pages 429-451, August.
    30. repec:fpr:resrep:kamiljonakramov is not listed on IDEAS
    31. Laurent Wagner, 2014. "Identifying thresholds in aid effectiveness," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(3), pages 619-638, August.
    32. Patrick Guillaumont, 2009. "Caught in a trap. Identifying the least developed countries," Post-Print hal-00436331, HAL.
    33. repec:unu:wpaper:wp2012-05 is not listed on IDEAS
    34. Stefan C. Norrbin & F. Pinar Yigit, 2005. "The Robustness of the Link between Volatility and Growth of Output," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(2), pages 343-356, July.
    35. Kanbur, Ravi, 2005. "Reforming the Formula: A Modest Proposal for Introducing Development Outcomes in IDA Allocation Procedures," CEPR Discussion Papers 4971, C.E.P.R. Discussion Papers.
    36. repec:fpr:ifprib:kamiljonakramov is not listed on IDEAS
    37. repec:bla:rdevec:v:13:y:2009:i:s1:p:452-463 is not listed on IDEAS
    38. Benjamin Leo, 2010. "Inside the World Bank’s Black Box Allocation System: How Well Does IDA Allocate Resources to the Neediest and Most Vulnerable Countries?," Working Papers 216, Center for Global Development.
    39. Paul Collier & Benedikt Goderis, 2009. "Does Aid Mitigate External Shocks?," Review of Development Economics, Wiley Blackwell, vol. 13(s1), pages 429-451, 08.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mathilde Closset & Sosso Feindouno & Patrick Guillaumont & Catherine Simonet, 2017. "A Physical Vulnerability to Climate Change Index: Which are the most vulnerable developing countries?," Post-Print hal-01719925, HAL.
    2. Yasemin Bal Gündüz & Masyita Crystallin, 2018. "Do IMF programs catalyze donor assistance to low-income countries?," The Review of International Organizations, Springer, vol. 13(3), pages 359-393, September.
    3. Patrick Guillaumont & Sylviane Guillaumont Jeanneney & Laurent Wagner, 2021. "How to Allocate New External Financing to African Countries? The Vulnerability Challenge. A Briefing in Response to the Paris Summit on Financing African Economies [Comment allouer les financements," Post-Print hal-03218024, HAL.
    4. Sena Kimm Gnangnon, 2022. "Effect of Structural Economic Vulnerability on the Participation in International Trade," JRFM, MDPI, vol. 15(9), pages 1-36, September.
    5. Patrick GUILLAUMONT & Catherine SIMONET, 2011. "To what extent are African Countries Vulnerable to climate change? Lessons from a new indicator of Physical Vulnerability to Climate Change," Working Papers I08, FERDI.
    6. Akame, Afuge & Mavrotas, George, 2024. "The differential effects of foreign aid to sub-Saharan Africa," IOB Discussion Papers 2024.01, Universiteit Antwerpen, Institute of Development Policy (IOB).
    7. Matthieu Boussichas & Tancrede Voituriez & Julie Vaillé, 2019. "Tackling inequalities and vulnerabilities: Why and how G7 development policies could do better," Working Papers hal-02288094, HAL.
    8. Patrick Guillaumont & Laurent Wagner, 2022. "Three criteria that a multidimensional vulnerability index should meet to be used effectively [Trois critères que doit remplir un indice de vulnérabilité multidimensionnelle pour être utilisé effic," Post-Print hal-03662944, HAL.
    9. Feindouno, Sosso & Guillaumont, Patrick & Simonet, Catherine, 2020. "The Physical Vulnerability to Climate Change Index: An Index to Be Used for International Policy," Ecological Economics, Elsevier, vol. 176(C).
    10. Mehmet Pinar & Thanasis Stengos & Nikolas Topaloglou, 2022. "Stochastic dominance spanning and augmenting the human development index with institutional quality," Annals of Operations Research, Springer, vol. 315(1), pages 341-369, August.
    11. Gnangnon, Sèna Kimm, 2022. "Effect of structural economic vulnerability on the participation in international trade," EconStor Preprints 262004, ZBW - Leibniz Information Centre for Economics.
    12. Lisa Chauvet & Marin Ferry, 2023. "L’efficacité de l’aide : quelles évolutions de la littérature depuis deux décennies ? WP329," Working Papers hal-04141543, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Patrick Guillaumont, 2009. "An Economic Vulnerability Index: Its Design and Use for International Development Policy," Oxford Development Studies, Taylor & Francis Journals, vol. 37(3), pages 193-228.
    2. Patrick Guillaumont & Laurent Wagner, 2014. "Aid Effectiveness for Poverty Reduction: Lessons from Cross‑country Analyses, with a Special Focus on Vulnerable Countries," Revue d’économie du développement, De Boeck Université, vol. 22(HS01), pages 217-261.
    3. Pham, Ngoc-Sang & Pham, Thi Kim Cuong, 2020. "Effects of foreign aid on the recipient country’s economic growth," Journal of Mathematical Economics, Elsevier, vol. 86(C), pages 52-68.
    4. Patrick GUILLAUMONT, 2009. "Aid effectiveness for poverty reduction: macroeconomic overview and emerging issues," Working Papers P05, FERDI.
    5. Thi Kim Cuong PHAM & Ngoc-Sang PHAM, 2017. "Economic growth and escaping the poverty trap: how does development aid work?," Working Papers P197, FERDI.
    6. Boateng, Elliot & Agbola, Frank W. & Mahmood, Amir, 2021. "Foreign aid volatility and economic growth in Sub-Saharan Africa: Does institutional quality matter?," Economic Modelling, Elsevier, vol. 96(C), pages 111-127.
    7. Lisa Chauvet & Marin Ferry & Patrick Guillaumont & Sylviane Guillaumont Jeanneney & Sampawende J.-A. Tapsoba & Laurent Wagner, 2019. "Volatility widens inequality. Could aid and remittances help?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 155(1), pages 71-104, February.
    8. Momita, Yasuaki & Matsumoto, Tomoya & Otsuka, Keijiro, 2019. "Has ODA contributed to growth? An assessment of the impact of Japanese ODA," Japan and the World Economy, Elsevier, vol. 49(C), pages 161-175.
    9. Juliana Yael Milovich, 2018. "Does Aid Reduce Poverty?," OPHI Working Papers ophiwp122.pdf, Queen Elizabeth House, University of Oxford.
    10. Kimura, Hidemi & Mori, Yuko & Sawada, Yasuyuki, 2012. "Aid Proliferation and Economic Growth: A Cross-Country Analysis," World Development, Elsevier, vol. 40(1), pages 1-10.
    11. Angeles, Luis & Neanidis, Kyriakos C., 2009. "Aid effectiveness: the role of the local elite," Journal of Development Economics, Elsevier, vol. 90(1), pages 120-134, September.
    12. Feeny, Simon & de Silva, Ashton, 2012. "Measuring absorptive capacity constraints to foreign aid," Economic Modelling, Elsevier, vol. 29(3), pages 725-733.
    13. Patrick GUILLAUMONT, 2008. "Adapting Aid Allocation Criteria to Development Goals," Working Papers P01, FERDI.
    14. Lisa Chauvet & Patrick Guillaumont, 2009. "Aid, Volatility, and Growth Again: When Aid Volatility Matters and When it Does Not," Review of Development Economics, Wiley Blackwell, vol. 13(3), pages 452-463, August.
    15. Gaoussou Diarra & Patrick Plane, 2014. "Assessing the World Bank's Influence on the Good Governance Paradigm," Oxford Development Studies, Taylor & Francis Journals, vol. 42(4), pages 473-487, December.
    16. Kyriakos C. Neanidis & Dimitrios Varvarigos, 2007. "The Allocation of volatile aid and economic growth: Evidence and a suggestive theory," Discussion Paper Series 2007_07, Department of Economics, Loughborough University, revised Mar 2007.
    17. Rohen d'AIGLEPIERRE et Laurent Wagner, 2017. "Macroeconomic Crisis, Primary Education and Aid Effectiveness," Working Paper def86062-d26a-4379-af8d-c, Agence française de développement.
    18. Kathavate, Jay & Mallik, Girijasankar, 2012. "The impact of the Interaction between institutional quality and aid volatility on growth: theory and evidence," Economic Modelling, Elsevier, vol. 29(3), pages 716-724.
    19. Patrick GUILLAUMONT, 2011. "Assessing the impact of the special support measures for least developed countries: an analytical frame work and some preliminary results," Working Papers P17, FERDI.
    20. Laurent Wagner, 2014. "Identifying thresholds in aid effectiveness," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(3), pages 619-638, August.

    More about this item

    Keywords

    aid allocation; economic vulnerability; human capital; Performance Based Allocation; multilateral development banks; aid effectiveness;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:90:y:2017:i:c:p:27-40. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.