What's wrong with foreign aid? Many policymakers, aid practitioners, and scholars have called into question its ability to increase economic growth, alleviate poverty, or promote social development. At the macro level, only tenuous links between development aid and improved living conditions have been found. At the micro level, only a few programs outlast donor support and even fewer appear to achieve lasting improvements. The authors of this book argue that much of aid's failure is related to the institutions that structure its delivery. These institutions govern the complex relationships between the main actors in the aid delivery system and often generate a series of perverse incentives that promote inefficient and unsustainable outcomes. In their analysis, the authors apply the theoretical insights of the new institutional economics to several settings. First, they investigate the institutions of Sida, the Swedish aid agency, to analyze how that aid agency's institutions can produce incentives inimical to desired outcomes, contrary to the desires of its own staff. Second, the authors use cases from India, a country with low aid dependence, and Zambia, a country with high aid dependence, to explore how institutions on the ground in recipient countries also mediate the effectiveness of aid. Throughout the book, the authors offer suggestions about how to improve aid's effectiveness. These suggestions include how to structure evaluations in order to improve outcomes, how to employ agency staff to gain from their on-the-ground experience, and how to engage stakeholders as "owners" in the design, resource mobilization, learning, and evaluation processes of development assistance programs.
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Clark Gibson is Associate Professor of Political Science and Director of the International Studies program at the University of California, San Diego. He is currently a member of the American Political Science Association Executive Committee. He has held positions at Indiana University and acted as a consultant for the World Bank, the United States Agency for International Development, and the Carter Center. Krister Andersson has worked with development aid issues since 1991. He has served as an international civil servant and consultant for the Food and Agriculture Organization of the United Nations, the World Bank and non-governmental organizations in Bolivia, Costa Rica and Sweden. He served as a technical advisor on environmental conflicts in Ecuador's Ministry of the Environment in 1997-1998. A postdoctoral fellow at the Center for the Study of Institutions, Population and Environmental Change (CIPEC) at Indiana University, he studies the politics of international development and environmental governance in non-industrial societies. Elinor Ostrom is Arthur F. Bentley Professor of Political Science and Co-Director of the Workshop in Political Theory and Policy Analysis, and the Center for the Study of Institutions, Population, and Environmental Change at Indiana University, Bloomington, Indiana. Sujai Shivakumar received his doctorate in Economics from George Mason University, specializing in Constitutional Political Economy, and later pursued post-doctoral research in the political economy of development at the Workshop in Political Theory and Policy Analysis at Indiana University. He is currently an official with the US National Academies' Board on Science, Technology, and Economic Policy.
As an increasing portion of the development community now recognizes, sending oodles of money to poor countries does not make them rich and may even make them poorer. This important book explains why. The authors' discussion is clear, straightforward, and easy to understand Journal of Economic Behavior and Organization
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