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ID 2.0 > Development Aid > Flashcards

Development Aid Flashcards

1
Q

what is aid?

A

gov transfers to poor countries for dev purposes

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2
Q

what is Official Development Assistance (ODA)?

A

gov aid to promote econ dev and welfare

  • foreign aid ‘gold standard’
  • recipients: countries and multilateral dev institutions
  • donors: state or executive agencies
  • give: concessional grants and soft loans
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3
Q

if an economic actor finances for profits/investment and indirectly finances dev, is that aid or trade?

A

trade

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4
Q

if a state directly invests or trades, but not concesionally, is that aid or trade? (e.g. China in Africa)

A

trade

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5
Q

what are the motives to provide aid?

A
  1. humanitarian motives: moral duty
  2. enlightened self-interest
  3. political and strategic moves
  4. economic motives
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6
Q

what are humanitarian motives to provide aid?

A

moral duty

  • needs based
  • for poorest
  • in practice: most aid is actually to middle income countries, so not to poorest (so not a needs perspective)
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7
Q

what are enlightened self-interest motives to provide aid?

A
  • to prevent spill over of poverty to adv countries
  • so steer aid to countries presenting challenges
  • usually regional
  • not a ‘needs perspective’
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8
Q

what are the political and strategic motives to provide aid?

A
  • towards allies
  • towards those in conflict or important in preventing conflict
  • towards former colonies
  • not a needs perspective
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9
Q

what are the economic motives to provide aid?

A
  • towards those with econ. potential, attractive markets, strategic commodities needed by donors
  • mutual interest
  • conditions tied (tied aid)
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10
Q

what are the different channels for aid?

A
  1. bilateral channel: gov -> gov
    (biggest ODA share; 65% - 70%)
  2. multilateral channel: UN, IFIs, regional dev banks…
    (middle ODA share; 25% - 205%)
  3. civil lateral or non-gov channel: NGOs, co-financed by govs
    (smaller share; 5% - 10%)
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11
Q

what are the features of bilateral aid?

A

gov to gov

  • visibility and profile for indiv. donors
  • alignment with pol/strategic/security interests
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12
Q

what are the features of multilateral aid?

A

UN, IFIs..

  • neutral, apolitical
  • universality of allocation criteria
  • large-scale possible
  • specialized agencies build up know-how (WTO, UNDP)
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13
Q

what are features of civil lateral or non-gov aid?

A

NGOs, co-financed by govs

  • smaller scale
  • closer to poor
  • commitment and non-profit orientation
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14
Q

how much aid is given, relative to other financial flows (investment)

A

very little

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15
Q

who is the main recipient of aid?

A

middle income countries

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16
Q

what is project aid?

A

limited in time, area and goals

17
Q

what is program aid?

A

several activities integrated into 1 broader goal

18
Q

what is sector aid?

A

assistance to entire sector

19
Q

what is budget support aid?

A

contributes to overall development budget

  • must agree on overall policies
  • implementation left to receiving gov
20
Q

what are the trends of aid since 2000?

A
  • increasing aid
    • > although mostly for refugees
  • decrease in aid to lower developing countries
  • MDGs/SDGs steer aid
  • less projects and more budget support to countries on track
  • increase in debt relief
21
Q

What is the Heavily Indebted Poor Countries (HIPC)?

A

1996
for debt relief of poorest countries
37 countries eligible (Africa focused - 31)

22
Q

what is a large challenge for the Heavily Indebted Poor Countries (HIPC)?

A

ensuring that the debt doesn’t return to unsustainable levels

23
Q

why can aid be an obstacle for development?

A
  1. fragmentation
  2. dependence
  3. parallel institutions
24
Q

what is the fragmentation risk of aid?

A

too many donors and projects

  • high transaction costs
  • burden on already fragile capacity of state institutions
  • coordination problems
25
Q

what is the dependence risk of aid?

A
  • too much aid
  • absence of exit strategies
  • accountability trap: less incentive to collect taxes, more accountable to donors than population
26
Q

what is the parallel institutions risk of aid?

A

donors create own institutions to implement

  • hampers local capacity to build
  • drains qualified staff from gov (higher salaries)
27
Q

what is the goal of the 2015 Paris Agenda?

A

increase aid effectiveness through:

  1. ownership for receiving country
  2. alignment with policies of receiving gov
  3. coordination and harmonization among donors

ID 2.0 (12 decks)

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