Measuring Aid Flows: A New Approach

34 Pages Posted: 21 Apr 2011

See all articles by Charles C. Chang

Charles C. Chang

World Bank

Eduardo Fernandez-Arias

Inter-American Development Bank (IDB)

Luis Servén

World Bank - Development Research Group (DECRG)

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Date Written: December 1998

Abstract

The debate on the effectiveness of foreign aid has intensified in recent years as aid has come under increasing budgetary pressures in donor countries. Whatever the merits of the opposing arguments, the fundamental issue arises of whether conventionally-used measures of aid such as ODA, which lump together grants and loans, accurately reflect true aid flows. This paper analyzes the methodological shortcomings of conventional aid measures, and proposes a new valuation approach that measures official aid flows as the sum of grants and the grant equivalents of official loans. This conceptually superior aid measure can diverge significantly from the conventional aggregates and provide a quite different view on major aid trends.

Suggested Citation

Chang, Charles C. and Fernandez-Arias, Eduardo and Servén, Luis, Measuring Aid Flows: A New Approach (December 1998). IDB Working Paper No. 320, Available at SSRN: https://ssrn.com/abstract=1817185 or http://dx.doi.org/10.2139/ssrn.1817185

Charles C. Chang (Contact Author)

World Bank

1818 H Street, N.W.
Washington, DC 20433
United States

Eduardo Fernandez-Arias

Inter-American Development Bank (IDB) ( email )

1300 New York Avenue, NW
Research Department
Washington, DC 20577
United States
202-623-3783 (Phone)
202-623-2481 (Fax)

Luis Servén

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

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