2/6 Aid, Growth and Macroeconomic Management Seminar: What is the aggregate impact of aid on growth?

Channing Arndt, Professor, University of Copenhagen and UNU-WIDER
UNU-WIDER

Channing Arndt, Professor, University of Copenhagen and UNU-WIDER, giving a presentation on 'What is the aggregate impact of aid on growth?' at the Aid, Growth and Macroeconomic Management Results Meeting Seminar held in Copenhagen, Denmark, 2012. 

This talk is based on the UNU-WIDER working papers Aid and Growth: Have We Come Full Circle and Aid Effectiveness: Opening the Black Box.

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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