Towards Achieving the MDGs:
Addressing Absorptive Capacity
Constraints
Francois Bourguignon
Chief Economist and Senior Vice President
The World Bank
Presentation at the ECOSOC High Level Policy Dialogue
The United Nations
March 17,2005
Aid absorptiveness
Return to Aid
(e.g. GDP growth rate)
Country 1
B
A
Volume of aid (e.g. Aid/GDP)
Country 2
Illustration from of the Ethiopia
Model (Mams, WB)
MDG 1: Share of Population Living
on $1 (PPP) per day or less (%)
38
36
34
32
30
28
26
24
22
20
18
2002
2003
2004
2005
2006
2007
Base case
2008
2009
2010
Infrastructure only
2011
2012
Full MDGs
2013
2014
2015
MDG 2: Net Primary School
Completion Rate (%)
110
100
90
80
70
60
50
40
30
20
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Base case
Infrastructure only
Full MDGs
MDG 4: Under-Five Mortality Per 1,000
Live Births
170
150
Base
130
Infrastructure
110
90
Full MDGs
70
50
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Foreign grants necessary to reach the
MDGs (US dollar per capita)
70
60
50
Full MDGs
40
30
Infrastucture
20
Base
10
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Real Wage for Workers with SecondarySchool Education (Birr)
3200
3000
Infrastructure
2800
2600
Full MDGs
2400
2200
Base
2000
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Real exports as a share of GDP
18
16
14
12
10
8
6
4
2
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Base case
Infrastructure only
Full MDGs
PV of extra MDG grants ($bn)
Time sequencing of spending
and MDG costs (excl. Infrastructure)
12
11
No productivity gain
10
9
8
7
Productivity gain
6
5
0
10
20
30
40
50
Share of extra MDG grants (%) 2003-09
60
70