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Reforming Performance-Based Aid Allocation Practice

Research paper by Patrick Guillaumont, Mark McGILLIVRAY, Thi Kim Cuong Pham

Indexed on: 18 Mar '16Published on: 03 Jul '15Published in: World Development



Abstract

Performance-based aid allocation systems are used by a number of multilateral agencies to allocate aid among developing countries. A number of bilateral agencies also allocate aid on the basis of the performance of recipients, albeit in a less systematic way than these multilateral agencies. This paper points to a number of fundamental problems associated with performance-based aid allocation systems, including a problematic balancing of need and performance criteria, being reductionist with respect to the drivers of effective aid and not being sufficiently nuanced with respect to performance by ignoring a lack of human capital and economic vulnerability in recipient countries. Together with providing a theoretical framework that articulates these issues, this paper introduces and outlines the papers that follow in this Special Section.