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How to take into account vulnerability in aid allocation criteria and lack of human capital as well: improving the performance based allocation

Author

Listed:
  • Patrick GUILLAUMONT

    (Ferdi)

  • Sylviane GUILLAUMONT JEANNENEY

    (Ferdi)

  • Laurent WAGNER

    (Ferdi)

Abstract
This paper considers why and how the PBA (performance based allocation) used in multilateral development banks and in particular at IDA, could be improved by taking the structural vulnerability of eligible countries into account. This improvement is needed for several reasons. 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, in particular vulnerability and lack of human capital. It neglects the lessons of the aid effectiveness literature, in particular on the shock dampening effect of aid.

Suggested Citation

  • Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY & Laurent WAGNER, 2010. "How to take into account vulnerability in aid allocation criteria and lack of human capital as well: improving the performance based allocation," Working Papers P13, FERDI.
    • Handle: RePEc:fdi:wpaper:682
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    File URL: http://www.ferdi.fr/sites/www.ferdi.fr/files/publication/fichiers/P13_Guillaumont_WagnerWEB.pdf
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    References listed on IDEAS

    as
    1. 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.
    2. Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY, 2009. "Accounting for Vulnerability of African Countries in Performance Based Aid Allocation," Working Papers P08, FERDI.
    3. 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).
    4. 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.
    5. Patrick Guillaumont, 2009. "An Economic Vulnerability Index: Its Design and Use for International Development Policy," Post-Print hal-00416800, HAL.
    6. Patrick GUILLAUMONT, 2008. "Adapting Aid Allocation Criteria to Development Goals," Working Papers P01, FERDI.
    7. Laurent Wagner, 2007. "Thresholds in Aid Effectiveness," Post-Print hal-00177460, HAL.
    8. 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.
    9. Lisa CHAUVET & Patrick GUILLAUMONT, 2003. "Aid and Growth Revisited: Policy, Economic Vulnerability and Political Instability," Working Papers 200327, CERDI.
    10. 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.
    11. P. Guillaumont & L. Chauvet, 2001. "Aid and Performance: A Reassessment," Journal of Development Studies, Taylor & Francis Journals, vol. 37(6), pages 66-92.
    12. Patrick Guillaumont & Sylviane Guillaumont Jeanneney & Désiré Vencatachellum, 2009. "Accounting for Vulnerability of African Countries in Performance Based Aid Allocation," Post-Print hal-00444193, HAL.
    13. 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.
    14. Akramov, Kamiljon T., 2012. "Foreign aid allocation, governance, and economic growth:," Issue briefs 72, International Food Policy Research Institute (IFPRI).
    15. 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.
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    17. Paul Collier & Benedikt Goderis, 2009. "Does Aid Mitigate External Shocks?," Review of Development Economics, Wiley Blackwell, vol. 13(3), pages 429-451, August.
    18. repec:fpr:resrep:kamiljonakramov is not listed on IDEAS
    19. Patrick Guillaumont, 2009. "Caught in a trap. Identifying the least developed countries," Post-Print hal-00436331, HAL.
    20. repec:unu:wpaper:wp2012-05 is not listed on IDEAS
    21. Hudson, John, 2015. "Consequences of Aid Volatility for Macroeconomic Management and Aid Effectiveness," World Development, Elsevier, vol. 69(C), pages 62-74.
    22. 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.
    23. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, vol. 64(2), pages 547-570, April.
    24. 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.
    25. 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

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    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. 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).
    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. 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.
    7. 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).
    8. 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.
    9. Lisa Chauvet & Marin Ferry, 2023. "L’efficacité de l’aide : quelles évolutions de la littérature depuis deux décennies ? WP329," Working Papers hal-04141543, HAL.
    10. Sena Kimm Gnangnon, 2022. "Effect of Structural Economic Vulnerability on the Participation in International Trade," JRFM, MDPI, vol. 15(9), pages 1-36, September.
    11. 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.
    12. Gnangnon, Sèna Kimm, 2022. "Effect of structural economic vulnerability on the participation in international trade," EconStor Preprints 262004, ZBW - Leibniz Information Centre for Economics.

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    More about this item

    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

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