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Impact of International Aid on Poverty

How Effective Is Foreign Aid ?

Donor Performance

The extent to which donors have been successful in poverty alleviation is controversial. Nopoor paints a full picture of donor performance. The emergence of new actors in development cooperation such as official donors from Southern economies, as well as non-governmental organisations (NGOs) and charitable foundations, affects the functioning of the international aid architecture and raises new questions on aid effectiveness.

Allocation and Effectiveness of Aid

One aspect of aid effectiveness and its impact on poverty is how aid is allocated by the donor. Nopoor investigates the channels (e.g. NGOs, public sector) through which the EU distributes its aid, and the EU’s performance in allocating aid. Researchers explore specific problems in the donor-recipient relationship that might inhibit the effectiveness of foreign aid (e.g. corruption), suggesting a new aid allocation formula that combines considerations of needs and governance quality in recipient countries.

The overall objective of this research is to paint a full picture of donor performance using a variety of methodological approaches (case studies, comparative country studies, cross-country analyses and theoretical analyses) and to derive reform proposals from it. More specifically, we aim to:

  1. Evaluate the effectiveness of foreign aid in poverty reduction with new insights into the impact of aid on recipients (empowerment and ownership) 
  2. Paint a picture of recent developments in the international aid architecture, including the Paris Declaration, private donors and South-South cooperation 
  3. Consider alternative sources of development financing, particularly hard loans 
  4. Derive guidelines for a reform of EU aid policy 

Because trade and aid are linked, and sometimes in conflict, close connections will be established with Impact of Globalisation. The political aspects of aid are closely related to our research on States & Political systems as internal governance influences the efficiency of external aid. Research on Impact of Foreign Aid will be an important input for work on reviewing Policy options.

What is our work for this specific research ?

  • The impact of public aid on poverty
  • Analyse aid on the donor side 
  • The emerging international aid players: South-South cooperation and private donors 

Research examples

Cross-Country Analysis: Non-concessional loans for development
Under which conditions should governments of poor countries take out non-concessional loans to increase investment for development and to reduce poverty? 

Vietnam: Aid projects for women‘s empowerment
What are the beneficiaries’ perspectives regarding their social inclusion and empowerment within selected aid projects? Research goes from individual life perspectives to future strategies towards a decent life. 

Cross-country analysis: The impact of aid on Millennium Development Goals (MDGs)
Did aid really serve to achieve certain Millennium Development Goals, such as improved access to education? What lessons can we learn for the future? What could be priorities for reform?