A Wider Approach to Aid Effectiveness: Correlated Impacts on Health, Wealth, Fertility and Education

Abstract

The 2005 G8 summit in Scotland focused attention on the commitment of the industrialized world to promoting economic/social development in Africa and other parts of the developing world. The debates about aid delivery took place in an atmosphere of scepticism about the benefits that foreign aid might bring. For example, at the time of the summit, many newspapers reported recent IMF research casting doubt at the effectiveness of aid expenditure.¹ This pessimistic news contrasts strongly with some of the recent academic literature. The balance of evidence in the academic literature — which has not received a great deal of attention outside the academic community — is that, on average, aid does have some beneficial impact on human development (Addison et al. 2005; Clemens et al. 2004). This is not to say that aid will ever close the income gap between the northern and southern hemispheres, but rather that aid recipients experience better development outcomes, on average, than they would in the absence of aid.