Thursday, 2 December 1999

From "Aid conditionality"

By Tony Killick (in Companion to development studies, p. 482).

It appears that the programmes are instumental in sterngthening export and balance of payents performance but have little impact on inflation; they do not typically make much difference to the pace of economic growth; but they are consistently associated with reduced investment levels, which threatens economic progress in the longer term [...]

Among the possible explanations of weak results, poor programme implementation is a large problem, manifested by programmes which break down or take far longer than originally planned, and a lot of pretending that conditions [...] have been met when the reality is otherwise [...] The revealed leverage of programmes over various policy instruments is quite weak. It appears that they can make a decisive difference to policy instruments (like the exchange rate) which can readily be monitored, are directly controlled by the goverment, involve a few individuals and agencies, and are not easy to organize against. But the results are more problematical when it comes to complex structural, distributional or institutional measures.

This limited effectiveness of conditionality is regrettable because the evidenc further shows that, when exectued, the IFIs' approach to policy does result in improved economic performance [...]

[Cf. also Killick et. al. 1998, esp. Ch 7].

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