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A NEW APPROACH TO THE ROLE OF DEVELOPMENT AID FOR POVERTY REDUCTION

EUROPEAN POLICY BRIEF

A criticism that is frequently levelled against the current pattern of aid allocation is the
coexistence of 'aid darlings' and 'aid orphans' among recipient countries. It subsists in spite of the coming to
the fore of a new approach to development cooperation that emphasized policy dialogue, country ownership
and the need to get rid of conditionalities and reform overload or high transaction costs. Heralded by the
Paris Declaration (March 2005) and the Accra Agenda for Action (September 2008), this approach also
privileged new aid modalities, General Budget Support (GBS) in particular, considered to be especially
suitable to meet the above objectives. Yet, results proved rather disappointing and ex post conditionalities
were soon re-introduced, leading to suspension or disruption of GBS in countries such as Nicaragua and
Honduras. Donor agencies that are well-known for their rigour, such as SIDA (Sweden) and DFID (United
Kingdom), have even decided to give up budget support and return to aid modalities -programmes and
projects- that better lend themselves to monitoring and sanction in the event of non-compliance with set
conditions.

This policy brief has been published on the European's Commission website:

https://ec.europa.eu/research/social-sciences/index.cfm?pg=library&lib=policy_briefs#nopoor