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Aid allocation and poverty reduction (Inglês)

The authors derive a poverty-efficient allocation of aid and compare it with actual aid allocations. They build the poverty-efficient allocation in two stages. First they use new World Bank ratings of 20 different aspects of national policy to establish the current relationship between aid, policies, and growth. Onto that, they add a mapping from growth to poverty reduction, which reflects the level and distribution of income. They compare the effects of using headcount and poverty-gap measures of poverty. They find the actual allocation of aid to be radically different from the poverty-efficient allocation. In the efficient allocation, for a given of poverty, aid tapers in with policy reform. In the actual allocation, aid tapers out with reform. In the efficient allocation, aid is targeted disproportionately to countries with severe poverty and adequate polices-the type of country where 74 percent of the world's poor live. In the actual allocation, such countries receive a much smaller share of aid (56 percent) than their share of the world's poor. With the present allocation, aid is effective in sustainably lifting about 30 million people a year out of absolute poverty. With a poverty-efficient allocation, this would increase to about 80 million people. Even with political constraints introduced to keep allocations for India and China constant, poverty reduction would increase to about 60 million. Reallocating aid is politically difficult, but it may be considerably less difficult than quadrupling aid budgets, which is what the authors estimate would be necessary to achieve the same impact on poverty reduction with existing aid allocations.


  • Autor

    Collier, Paul Dollar, David

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    Documento de trabalho sobre pesquisa de políticas

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    Leste Asiático e Pacífico, Sul da Ásia,

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    Aid allocation and poverty reduction

  • Palavras-chave

    provision of social safety nets;impact on poverty reduction;terms of poverty reduction;headcount measure of poverty;development research group;primacy of poverty reduction;headcount index of poverty;incidence of public spending;foreign aid on saving;reduction in poverty;elasticity of poverty;per capita income;effect of aid;impact of aid;effectiveness of aid;increase in income;Macroeconomics & Growth;Macroeconomics and Growth;nominal exchange rate;overseas development council;availability of information;measurement of poverty;incidence of poverty;risk of conflict;economic policy reform;poverty reduction impact;per capita cost;increase in population;poverty gap measure;panel data analysis;incidence of tax;per capita gnp;perspectives on aid;failure of conditionality;high opportunity cost;headcount poverty rate;level of policy;Rule of Law;good policy environment;elimination of poverty;policy and institution;aid allocation;diminishing return;aid budget;average cost;high poverty;marginal impact;optimal allocation;severe poverty;public expenditure;linear relationship;standard deviation;poverty problem;shadow value;absolute poverty;political constraint;constant elasticity;unequal society;private investment;increasing function;government ownership;Civil War;poverty alleviation;concessional lending;incentive regime;franc zone;differential in poverty;information content;ordinal index;statistical validity;short period;policy stance;Macroeconomic Analysis;development study;equal weight;populous country;Political Economy;quantitative measure;donor interest;voting patterns;investment rate;macroeconomic indicator;behavioral model;poverty threshold;small country;global poverty;policy variable;positive impact;living standard;smaller share;national policy;joint product;point estimate;aid effectiveness;absorptive capacity;important component;research assistance;mass poverty;humanitarian emergency;core objectives;marginal efficiency;aid flow;long-term growth;recipient countries;average elasticity;poverty headcount;income inequality;regional disparity;equilibrium condition;aid receipt;relative change;promoting growth;estimated elasticity;Learning and Innovation Credit;intertemporal variation;poverty impact;domestic poverty;international phenomenon;budgetary choice;aid donor;monotonic transformation;international agency;quantitative estimate;overseas aid;donor behavior;tax reduction;net effect;density function;marginal improvement;large population;small population;



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