Kiel Working Papers, Kiel Institute for World Economics
No 1103:
Shooting the Messenger of Good News: A Critical Look at the World Bank's Success Story of Effective Aid
Peter Nunnenkamp
Abstract: In a report presented at the UN Conference on Financing
for Development in March 2002, the World Bank claims that the effectiveness
of its financial aid has improved substantially by targeting aid at poor
developing countries pursuing sound economic policies. However, the World
Bank's success story rests on an extremely weak foundation: First, the
institution's contribution to financial rescue packages for some emerging
markets, rather than poverty concerns and policy assessments, dominated the
distribution of World Bank financing. Second, the picture portrayed in the
report takes a bad turn if only two outliers with extremely high per capita
aid (Cape Verde and Honduras) are excluded from the sample. Third,
according to our regression results, the allocation of World Bank aid did
not improve in the course of the 1990s.
Keywords: financial aid, World Bank, International Development Association; (follow links to similar papers)
JEL-Codes: F35; (follow links to similar papers)
23 pages, April 2002
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