IS AID EFFECTIVE?

What do you think?

To link this discussion with our previous one - how much do you think perceptions of effectiveness/ineffectiveness shape people's attitudes to giving aid (privately and/or as a taxpayer)?

Aid effectiveness is a very hot topic at the moment, with a big meeting (High Level Forum) on the topic having concluded in Ghana earlier this month.

Two of the key issues surrounding aid effectiveness are:
(a) what impact does aid have on development?
(b) what are the most effective ways of delivering aid?

The impact of aid on development

Depending on what you think development is all about, you might measure the effectiveness of aid by looking at its impact on economic growth broadly, or specifically povery reduction, or progress in meeting the Millenium Development Goals.

Of course, even with a clear goal in mind, showing a causal link between aid and any 'effect' (good or bad) can be difficult. Examples of people who have come to varying conclusions on the matter include:

1. Helen Hughes, an Australian economist who has argued that 'Aid has failed the Pacific'
2. Jeffrey Sachs, who believes aid works and should be upscaled to reduce poverty.
3. Rajan and Subramanian, who studied the link between aid and growth since 1960 and showed little correlation.
4. Tarp - his conclusion is somewhat more nuanced and positive.

Next post: Is aid effective? p2 - effective ways of delivering aid

Over to you...