Aid, Agriculture and Poverty in Developing Countries

Abstract

The authors make two contributions to the debate on aid-effectiveness, illustrating that for impact on poverty what matters is not just the level but also the composition and stability of aid. One specific implication of this for aid policy is that aid most effectively reduces poverty if it supports public (and other) expenditures which are supportive of agricultural development. Regression analysis confirms that these are not only direct expenditure on agriculture, but also on education and infrastructure, and military expenditure has a negative impact. Three factors appear to be particularly conducive to the development of stable pro-poor expenditure patterns (and in particular pro-agriculture expenditure patterns). These are expenditure strategies which protect the poor against risk, the development of stable relations between governments and aid donors, and long-term political commitment to pro-poor strategies by government. The argument is pursued partly by panel-data econometric analysis of developing countries as a whole, and partly by case studies of sustained and non-sustained green revolutions in heavily aid-dependent countries in Africa. Copyright � 2006 The Authors; Journal compilation � 2006 Blackwell Publishing Ltd.

The Politics of Inclusive Development

“…5 Because of data problems, studies of the impact of public expenditure in Africa are relatively sparse by comparison with Asia and Latin America. However, across four case-study countries of Africa (Uganda, Ethiopia, Malawi, and Zimbabwe), Mosley and Suleiman (2007) find, in similar vein to the IFPRI studies, that infrastructure and education spending are an important influence on rural poverty in addition to direct spending on agriculture. In addition, the Mosley and Suleiman study finds that the stability of pro-agriculture expenditure, as well as its level, is a significant influence on rural poverty levels.…”

“…5 Because of data problems, studies of the impact of public expenditure in Africa are relatively sparse by comparison with Asia and Latin America. However, across four case-study countries of Africa (Uganda, Ethiopia, Malawi, and Zimbabwe), Mosley and Suleiman (2007) find, in similar vein to the IFPRI studies, that infrastructure and 4 'The surest way to industrialise the Gold Coast would be to multiply by four or five the resources available to the [Agriculture] department for fundamental research into food production' (Lewis 1953, para. 24).…”

Aid Effectiveness for Poverty Reduction: Lessons from Cross‑country Analyses, with a Special Focus on Vulnerable Countries

“…One can also wonder which type of expenditure benefit the most to the poor. For instance, expenditures dedicated to agriculture are generally pro-poor, as found by Mosley and Suleiman (2007).…”

“…Some studies have considered the effect of aid on the change in the level of another summary indicator of development or of welfare, such as the Human Development Index (Boone 1995;Kosack, 2003;Gomanee et al, 2005aGomanee et al, , 2005b, identifying aid effectiveness as its ability to improve the overall quality of life. Some authors have also looked for the impact of aid on the level of a specific indicator of human development, for instance infant mortality (Gomanee et al, 2005;Mosley and Suleiman 2007) or child mortality/survival (Burnside and Dollar 1998) or the school enrolment ratio (Michaelowa and Weber 2007, Dreher et al 2008, d'Aiglepierre and Wagner 2013.…”

Social Spending and Aggregate Welfare in Developing and Transition Economies

“…Similarly, Gomanee et al (2005b) show that aid improves welfare through higher social sector spending. Mosley and Suleiman (2007) point out that aid reduces poverty particularly when it is directed towards propoor sectors. In contrast, Gomanee, et al (2005b) …nd no evidence to suggest that aid a¤ects welfare through government expenditure, although they …nd that aid improves welfare outcomes.…”