Aid, Institutions and Development

Aid, Institutions and Development

New Approaches to Growth, Governance and Poverty

Ashok Chakravarti

In spite of massive flows over the past 50 years, aid has failed to have any significant impact on development. Marginalization from the world economy and increases in absolute poverty are causing countries to degenerate into failed, oppressive and, in some cases, dangerous states. To address this malaise, Ashok Chakravarti argues that there should be more recognition of the role economic and political governance can play in achieving positive and sustainable development outcomes.

Chapter 6: New Strategies for Aid and Development

Ashok Chakravarti

Subjects: development studies, development economics, economics and finance, development economics, politics and public policy, regulation and governance


POVERTY REDUCTION STRATEGIES In this chapter we shall first consider the PRSPs that have been prepared by a number of countries with support from the World Bank. We shall then review alternative aid strategies developed by other donors which place greater emphasis on economic and political governance. These approaches will be evaluated in the context of the new development paradigm that emerges from this study, with a view to assessing to what extent they present a coherent and credible path to sustainable growth. This analysis of PRSPs is based on a sample of ten country strategies from Africa, Latin America and Europe (for individual country strategy documents, see the World Bank website). In spite of the weaknesses in the PRSP process identified in chapter 5, it needs to be recognized that efforts by governments within this framework to involve civil society in the development dialogue and raise issues concerning aspects of governance, such as bureaucratic efficiency, transparency and corruption, are hopeful and long overdue. The new approach, which makes concerns relating to poor, marginalized groups, social exclusion, gender equity and grassroots participation an integral part of national development strategies, should also help to mainstream these problems and result in them being addressed more effectively. However, if a PRSP is to become the central document in the dialogue between donors and recipients, it needs to spell out a country’s development policies and strategy in a coherent and comprehensive manner. The fact that most of these countries are also operating under an...

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