Does aid work?

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Does aid work?
October 30, 2014

This panel discussion was hosted at the London School of Economics (LSE), with questions centered on global aid policies.

In his welcome address, IZA World of Labor’s Klaus F. Zimmermann told attendees how important collaboration was across academia and policy-makers, in order to enhance and improve modes of research.


He said: "Our approach was to bring in our expertise as labor economists and to talk with development economists about creating jobs to fight poverty to contribute to the debate: does aid help? It helps to find out whether people’s lives have become better. Evidence and policy evaluation is at the heart of the issue we’re dealing with here."

The World Bank’s David A. Robalino opened the discussion by advocating greater coordination among NGOs. He suggested that aid programs could be more effectively targeted if aid organizations made greater efforts to communicate with each other.

Robalino also noted that recent World Bank research on youth projects showed a mere 10% of programs have currently been evaluated, concluding that: "We need to create a coalition between academics and NGOs with a strong evaluation agenda."

This notion of evaluating aid programs was a key discussion point among the panelists. LSE’s Professor James Putzel highlighted the need for systematic and scientific evaluation, positing that development partners should be encouraged to evaluate their own work.

However, the speakers acknowledged the various obstacles preventing effective evaluation processes from being implemented. A core issue they discussed was the additional costs it would create, but LSE’s Gianmarco Ottaviano noted that greater use of technology is now helping countries to meet specific needs.

Of course, using technology efficiently requires a certain level of expertise, and Ottaviano said later that efforts to boost human capital and training can lead to skilled people moving to other countries with better prospects.

Ottaviano also touched upon problems stemming from national political conflict, which complicates intervention on a practical level. Nonetheless, he asserted that some programs, such as public works programs, have been shown to reduce the effects of poverty in countries where this is an issue.

The panel discussion then led to a lively debate with members of the audience, with questions surrounding: how aid programs should be regulated; whether programs should be shaped by aid recipients of donors; and whether we can improve internal governance in developing countries.

Some challenging points came from audience member Stefan Dercon, from the Department for International Development (DFID). He posited that the real question to ask was not "Does aid Work?" but "What do you do with the aid?" or "Where does aid work best?"

For Dercon, one of the first steps to improving aid should be finding ways to educate policymakers on up-to-date research, and nurturing partnerships to help them to govern their aid effectively.

The audience left the debate with plenty to think about. Poverty may seem an insurmountable problem, but the main message from these experts was one of continued communication, collaboration, and analysis. If academics, policymakers, and aid workers can work together and share their knowledge, we will all be better equipped to assess the current aid landscape, and improve how this aid is put in place.

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