Aid, Social Policy and Development

Abstract

This paper discusses past and current social policy strategies in the international aid architecture as an introduction to the UNU-WIDER Special Issue. Beginning in the 1990s, aid strategy and policy shifted to put a stronger emphasis on human development. This accelerated with the Millennium Development Goals (MDGs) and will continue under the Sustainable Development Goals (SDGs) which have even more ambitious targets. The paper also assesses some of the concerns associated with the 'Paris-style' aid modalities, and discusses major challenges for the future global development agenda.

Relative Effectiveness of Bilateral and Multilateral Aid on Development Outcomes

“…The variety of findings among the seven studies analyzing subsets of gross or net aid suggests that the relative effectiveness of bilateral and multilateral aid may vary depending on the specific outcomes targeted by aid flows, so looking at the impact. While studies may be limited by issues of data availability and quality (Addison et al., ), future studies that analyze the relationship between sector‐specific aid and sector‐specific outcomes, as in Basnett et al. 's () study of the effectiveness of aid for trade, may provide a better picture of when and if bilateral or multilateral aid might be more effective (Clemens et al., ; Gebhard et al., ).…”

“…However, critics argue that the continued practice of “tying” bilateral aid, often in the form of restrictions requiring aid funds be used to purchase goods from the donor country, can reduce the value of aid to recipients (Clay et al., ; OECD, ). Others note that the strategic or geopolitical orientation of aid delivered through bilateral channels (Barder, ; Berthélemy, ; Clay et al., ; Chung et al., ; Fleck and Kilby, ; Rodrik, ) and greater fragmentation of bilateral aid (Acharya et al., ; Addison et al., ; Barder, ; Houerou, ; OECD, ) might also decrease cost‐effectiveness. That said, several authors contend that direct accountability to donors (Barder, ), combined with bilateral donors’ institutional compatibility with recipient countries where they have long‐standing historical relationships (Cassen, ), and the greater volumes of aid disbursed by bilateral donors (Kharas, ; OECD, ) all serve to increase bilateral aid cost‐effectiveness relative to multilateral aid.…”

“…Similarly, in terms of cost‐effectiveness the development orientation of multilateral aid (Milner and Tingley, ; Miquel‐Florensa, ), pro‐development conditionality (Burnside and Dollar, ), and the perceived legitimacy of multilateral aid from the perspective of recipient countries (Barder, ; Bird et al., ; OECD, ; Rodrik, ) are all believed to increase the cost‐effectiveness of multilateral aid relative to bilateral aid. Other factors including the relatively lower fragmentation of multilateral aid (Addison et al., ; OECD, ), combined with the specialization and expertise of multilateral aid organizations (Askarov and Doucouliagos, ; Barder, ; OECD, ; Rodrik, ; Uneze, ) are further argued to increase multilateral aid cost‐effectiveness.…”

Fiscal Policy, State Building and Economic Development

“…The Millennium Development Goals and now the Sustainable Development Goals (SDGs) have placed fiscal policy, including domestic resource mobilisation, at the centre of national and international development efforts (United Nations, 2015). The SDGs imply large and sustained public expenditures to continue the success of the Millennium Development Goals in improving human development indicators, especially in the areas of access to basic health care and primary education, with a particular emphasis on ending gender discrimination (Addison, Niño-Zarazúa, & Tarp, 2015;Grown, Addison, & Tarp, 2016).…”

Poverty Reduction During 1990-2013: Did Millennium Development Goals Adoption and State Capacity Matter?

“…Being comparative, performance indicators like MDGs can influence state policy outputs, as they facilitate the monitoring of state behavior and serve as a tool for international governance (Kelley & Simmons, 2015). 3 Adoption of MDGs is also likely to have improved the targeting and flow of official development assistance (ODA), ensuring that aid emphasizes human development and/or is disproportionately allocated to countries that need to make the most progress on the MDGs (Addison, Niño-Zarazúa, & Tarp, 2015). Moreover, MDGs adoption has influenced national development plans, leading to the introduction of Poverty Reduction Strategy Papers (see Seyedsayamdost, 2017).…”