6/6 Aid, Growth and Macroeconomic Management Seminar: Macroeconomic management of aid – key challenges

Tony Addison, Chief Economist/Deputy Director, UNU-WIDER
UNU-WIDER

Tony Addison, Chief Economist and Deputy Director, UNU-WIDER, giving a presentation on 'Macroeconomic Management of Aid – Key Challenges' at the Aid, Growth and Macroeconomic Management Results Meeting Seminar held in Copenhagen, Denmark, 2012. 

More about the meeting: Aid & Growth Results Meeting - Denmark 2012

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Findings

Donors need to coordinate their aid to ensure that it does not have a Dutch Disease like effect.
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When seeking to develop human capacity donors must be aware of the capability trap.
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Projects aimed at democratic development will be more successful if they engage both opposition parties and civil society.
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Traditional development policy encourages countries to legitimize their institutions through mimicking form, rather than through demonstrating...
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Foreign aid has improved Malian democracy by strengthening both the economy and the civil society.
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Women’s rights are still seen as rights that have to give way to the goals of peace and justice, even when radical political changes take place.
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Three major trends are effecting urban Africa; growth, decentralization, and democratization.
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Partisan politics has motivated central government interference in Kampala’s governance.
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Urban poverty reduction requires improve municipal governance and the active involvement of the poor.
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Looking at aid volatility at only the aggregate level hides the facts that the volatility of individual aid sectors is often greater than overall aid...
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The more agricultural machinery is adopted the more associated CO2 emissions can be expected from the agricultural sector.
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In the short term environmental concerns such as water stress and environmental degradation present more of a threat to low income countries than...
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Successful capacity development requires a long-term, sector wide approach, and the involvement of the domestic government.
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As EU aid has become mainstream its distinctive features have become its biggest assets.
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While promoting employment is important, the greater development challenge is to generate higher earnings for those who are already working.
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With the right mix of budget support and aid on delivery, aid delivered through program based approaches is no more fungible than project aid.
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Aid is more likely to cause a Dutch Disease like effect in countries with weak governance.
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The function of an institution is more important than its form.
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Democracy assistance to Ghana has been most effective when aimed at projects supported by the incumbent government.
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Donors in Mali could have done more to avert the collapse of democracy.
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Transitional Justice needs to ensure that gender justice is integrated into wider processes of reform.
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Aid aimed at improving urban services should focus on local government capacity, and connecting local populations to those who provide their services.
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The Cities Alliance and urban poor funds represent new channels through which donors can fund local urban poverty movements.
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Looking at aid volatility at only the aggregate level hides the facts that volatility has different effects in different aid sectors.
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CO2 emissions are lower if machinery is powered with electricity rather than with diesel.
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Low income countries face high volatility in the short term and huge challenges in the long term. 
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There are 900 million people who work but earn too little to achieve a standard of living of US$2 a day.
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Donor coordination is crucial to limiting the fungibility of aid.
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Both fertilizer and pesticide consumption are associated with higher levels of CO2 emissions.
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Agricultural investment is a contributing factor for CO2 emissions.
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Droughts are associated with higher CO2 emissions, but other natural disasters are not.
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Volatility in one aid sector sometimes leads to volatility in another.
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 Nutritional measures taken during early childhood and school years can maximize developmental potential and lifelong health.
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The effectiveness of education aid is to a large degree dependent on the stability of the institutions in the recipient country.
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Political factors have a strong influence on the incidence and quality of evaluation processes and the extent to which their findings influence...
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The most successful projects and programmes in the healthcare sector are those that give local partners real ownership over the development process.
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Following the Paris Declaration principles of ownership, alignment, and harmonization is key to ensuring the effectiveness of health aid.
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An increase of education aid by one per cent increases the rate of primary education enrolment by 0.06 percentage points.
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Developing the technical capacity of those involved in education is a crucial part of improving educational quality.
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In recent years basic education has become largely universal, and gender equity in education access is close to being realized.
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Social protection programmes have the capacity to make a significant contribution to the global reduction of poverty and vulnerability.
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Aid fragmentation creates extra costs for recipient countries and reduces the effectiveness of foreign aid to health.
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Often national governments are bypassed when delivering aid designed to improve healthcare.
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Many of the problems related to capacity development in the education sector are the result of the project aid approaches adopted by donors.
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Development assistance to health will be most effective if there exists a relationship of mutual accountability between donors and recipients.
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Well-organized country health systems are vital if the MDGs on maternal and child health are to be achieved.
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It is more important to look for ways that aid can be used to strengthen local capacities than to seek proof that aid is working.
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