Scaling-up Foreign Aid: Will the ‘Big Push’ Work?

Authors


  • This article is the result of work being undertaken as part of a research project entitled ‘Achieving the Millennium Development Goals: The Role of Aid, Trade and NGOs’ (LP0562486). The project is supported by the Australian Research Council and World Vision of Australia. The views expressed in this article are those of the authors and not necessarily those of these funding organisations. The authors are grateful for useful comments on an earlier version of this article from two anonymous referees. The usual disclaimer applies.

Abstract

International donors are substantially scaling-up aid programmes. At the same time, there are widespread reservations over how much aid recipient countries can use effectively. Such concerns are supported by the aid effectiveness literature which finds that there are limits to the amounts of aid recipients can efficiently absorb. This article demonstrates that a ‘big push’ in foreign aid will not lead to diminishing returns as long as donors get the inter-country allocation of aid right. This is true even if donors provide aid at levels equal to the well-known target of 0.7 per cent of their gross national income.

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