Aid and Poverty Alleviation: An International Comparison

Abstract

This article evaluates the poverty alleviation effect of international aid provided by Japan, the United Kingdom, the United States, the Development Assistance Committee members, and multilateral organizations. A consistent poverty evaluation framework together with head count ratio data comparable across countries is employed. Results indicate that aid expansion by the government of Japan is relatively inefficient and ineffective in terms of poverty alleviation. On the other hand, the UK and multilateral institutions might have been most effective at the margin among the donors considered. Results for US aid indicate that major revisions of the amounts disbursed under its Economic Support Fund are required to improve the efficiency and marginal effectiveness of US aid in terms of poverty alleviation. However, the change in measures between 1985 and 1990 suggests a decline in poverty alleviation effectiveness for Japan and the UK, and a increase for the US.