This paper explores aid effectiveness by studying the effect of aid, aid volatility, and key development indicators, focusing on safe access to water and sanitation (W&S) in both urban and rural areas. Despite the importance of official development assistance (ODA) for these two subsectors, little global attention is given to its importance and its connectivity with different socio economic factors. In this study, we focus on the countries that receive aid for water and sanitation. We find that aid does have a discernible impact on access to W&S, particularly in rural areas, but that this impact is reduced by aid volatility, there is a clear evidence that ODA for water and sanitation lacks the appropriate orientation, and is not targeting most of the areas that are really in need.
ABSTRACT. Our study examines the effect of water utilization together with the effect of water quality on economic growth across countries. We constructed a panel of 177 countries covering the period of 1960-2009. We analyse two dependent variables, gross domestic product per capita and the average of five years of growth. The analysis is conducted using a fixed effects model and fixed effects with instrumental variables. We find that although water utilization affects growth, water quality also proves to be highly significant and affects growth in both the short and long run to a greater degree than water quantity.
International efforts have taken place to alleviate poverty by adopting several obligations within the international society; one of these obligations is the provision of safe access to water and sanitation. The MDGs helped people around the world to gain improved water sources and better sanitation. Although the sectoral aid increased from 20% between 1990 and 1992 (only 4.9% distributed for water supply and sanitation (W&S)) to 35% between 2002 and 2004 (only 3.9% allocated for W&S), facts showed that the allocated aid was biased to social aims rather than infrastructural targets. In this study, I am focusing on the donors’ commitment for W&S, whether their ODA for these two sub-sectors is aligned with the intentions of the SDGs. I find that donors allocated W&S aid by focusing on governments in general with higher governance indicators, and that poorer countries received a higher allocation of aid.
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