Overcoming Stagnation
in Aid-Dependent
Countries
N. van de Walle
Cornell University
Center for Global Development
The Question
What can be done in the low-income states
in which a large and regularly increasing
amount of aid has clearly failed to spur
development over the last half century?
Rethinking Aid in the 1990s
Move Away from State-led Development
Strategies
2. Move From Conditional Aid to ‘Selectivity’
3. Lessen Donor Fragmentation and
increase Ownership
1.
The Failure of Aid Reform
1. Lack of aid coordination
2. Failure to promote institutional capacity
3. Inability to change government incentives
4. Unchanging donor incentives
Promote Democracy in SLIS Countries
Increase the political selectivity of aid
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Enforce term limits, alternation in power
Free and fair elections
Strengthen legislatures, judiciary
Build a New Aid Relationship
How to avoid bothventriloquism and the
blank check?
* Simple, transparent conditionality
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Accept possibility of lower volumes
Foundation model
“Local” model
Donor transparency
Promote State Capacity
Civil service reform
Capacity utilization approach
* Restore economic planning
* Promote regional institutions
* Make project evaluation a local
responsibility