The international community has advanced in reforming the international aid system. Such reform comes at a time when there is a renewed skepticism about aid effectiveness and when the crisis sheds new doubts about the sustainability of donors´ commitments. At the same time, the international...

This paper dealt with the effectiveness of several alternatives of aid allocation in terms of poverty reduction. We use a model that admits the presence of diminishing returns to aid in the output and poverty functions. We shall discuss the impact of aid on poverty in a single country, showing...