Top experts in the field discuss how to improve the effectiveness of foreign aid, proposing practical solutions to specific problems rather than a utopian master plan.The urgency of reducing poverty in the developing world has been the subject of a public campaign by such unlikely policy experts as George Clooney, Alicia Keyes, Elton John, Angelina Jolie, and Bono. And yet accompanying the call for more foreign aid is an almost universal discontent with the effectiveness of the existing aid system. In "Reinventing Foreign Aid", development expert William Easterly has gathered top scholars in the field to discuss how to improve foreign aid. These authors, Easterly points out, are not claiming that their ideas will (to invoke a current slogan) Make Poverty History. Rather, they take on specific problems and propose some hard-headed solutions.Easterly himself, in an expansive and impassioned introductory chapter, makes a case for the "searchers" - who explore solutions by trial and error and learn from feedback - over the "planners" - who throw an endless supply of resources at a big goal - as the most likely to reduce poverty. Other writers look at scientific evaluation of aid projects (including randomized trials) and describe projects found to be cost-effective, including vaccine delivery and HIV education; consider how to deal with the government of the recipient state (work through it or bypass a possibly dysfunctional government?); examine the roles of the International Monetary Fund (a de-facto aid provider) and the World Bank; and analyze some new and innovative proposals for distributing aid.
Foreword by Nancy Birdsall
1 Introduction: Can't Take It Anymore? by William Easterly 1
I The Power of Scientific Evaluation - And Why Isn't It Done More Often? 45
2 Making Aid Work by Abhijit Banerjee and Ruimin He 47
3 Use of Randomization in the Evaluation of Development Effectiveness by Esther Duflo and Michael Kremer 93
4 It Pays to Be Ignorant: A Simple Political Economy of Rigorous Program Evaluation by Lant Pritchett 121
II The Problems of Aid-Financed Delivery of Public Services: The Gordian Knot of the State 145
5 Solutions When the Solution Is the Problem: Arraying the Disarray in Development by Lant Pritchett and Michael Woolcock 147
6 Donors and Service Delivery by Ritva Reinikka 179
7 The Illusion of Sustainability by Michael Kremer and Edward Miguel 201
8 An Aid-Institutions Paradox? A Review Essay on Aid Dependency and State Building in Sub-Saharan Africa by Todd Moss and Gunilla Pettersson and Nicolas van de Walle 255
III Dysfunctional Donors and How to Reform Them 283
9 Why Do Aid Agencies Exist? by Bertin Martens 285
10 Absorption Capacity and Disbursement Constraints by Jakob Svensson 311
11 Donor Fragmentation by Stephen Knack and Aminur Rahman 333
IV The IMF and World Bank 349
12 The IMF and Economic Development by James Raymond Vreeland 351
13 The Knowledge Bank by Jonathan Morduch 377
14 Debt Relief and Fiscal Sustainability for Heavily Indebted Poor Countries by Craig Burnside and Domenico Fanizza 399
V Imagining New Forms of Foreign Aid