Policy selectivity foregone: debt and donor behaviour in Africa
Policy selectivity foregone: debt and donor behaviour in Africa
Will the ongoing major programme of debt reduction affect ability and willingness of donors to direct aid where it can best be used?
On the premise that aid is more effective when the recipient country’s policy and institutional environment satisfies some minimal criteria, this paper:
- assesses the dynamic behind the high net resource transfers of donors and creditors to the countries of sub-Saharan Africa in the 1980s and 1990s
- analyses a panel of 37 recipient countries over the years 1978-98
The key findings of this paper are:
- net transfers were greater in poorer and smaller countries
- the quality of countries’ policy framework mattered little in determining overall net transfers
- donors were unable to exercise much selectivity once recipient countries became highly indebted
The paper concludes that comprehensive debt relief would restore donors’ ability to be selective with respect to the quality of countries’ policy, by making development assistance more effective.
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