Aid, Poverty Reduction and the 'New Conditionality'

27 Pages Posted: 2 Jul 2004

See all articles by Paul Mosley

Paul Mosley

University of Sheffield - Department of Economics

John Hudson

University of Bath - Department of Economics

Arjan Verschoor

University of East Anglia (UEA)

Abstract

The paper examines the effect of aid on poverty, rather than on economic growth. We devise a 'pro-poor (public) expenditure index', and present evidence that, together with inequality and corruption, this is a key determinant of the aid's poverty leverage. After presenting empirical evidence which suggests a positive leverage of aid donors on pro-poor expenditure, we argue for the development of conditionality in a new form, which gives greater flexibility to donors in punishing slippage on previous commitments, and keys aid disbursements to performance in respect of policy variables which governments can influence in a pro-poor direction.

Suggested Citation

Mosley, Paul and Hudson, John R. and Verschoor, Arjan, Aid, Poverty Reduction and the 'New Conditionality'. Available at SSRN: https://ssrn.com/abstract=552943

Paul Mosley (Contact Author)

University of Sheffield - Department of Economics ( email )

9 Mappin Street
Sheffield, S1 4DT
United Kingdom

John R. Hudson

University of Bath - Department of Economics ( email )

Claverton Down
Bath, BA2 7AY
United Kingdom
+44 (0)1225 825287 (Phone)
+44 (0)1225 323423 (Fax)

Arjan Verschoor

University of East Anglia (UEA) ( email )

Norwich Research Park
Norwich, Norfolk NR4 7TJ
United Kingdom

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