Poverty Efficient Aid Allocations - Collier/Dollar Revisited

Recent World Bank research has sparked a major debate about aid effectiveness and its implications for aid allocations. The main focus of attention has been the importance of good policy as a determinant of aid effectiveness and criterion for aid allocations. This paper briefly recaps the main arguments and evidence generated by Burnside/Collier/Dollar and their critics. It then focuses on the Collier/Dollar aid allocation models, subjecting them to a wider range of sensitivity tests to assess the robustness of their results. Finally, it analyses the relative efficiency of aid allocations over time and between donors.