Development Aid: Expectations, Effectiveness and Allocation

Abstract

The international community has come to expect much of foreign development aid in recent years, especially since the adoption of the Millennium Development Goals (MDGs) at the UN Millennium Summit in September 2000. The MDGs aim inter alia by 2015, to halve the 1990 figures for numbers of people living in extreme income poverty, achieve universal primary schooling, and reduce by two-thirds the 1990 mortality rate among children worldwide. A key component of the strategy to achieve, or at least work towards, the MDGs is a substantial scaling-up of aid flows by OECD donor nations (United Nations Millennium Project, 2005). This strategy is clearly evident in aid statistics on global Official Development Assistance (ODA) from members the Development Assistance Committee of the OECD (see Figure 1.1). The level of DAC ODA rose from US$69 billion in 2003 to US$107 billion in 2005, the highest annual level of ODA on record. While the level of ODA fell slightly to US$104 billion in 2006, it is expected to rise to US$130 billion in 2010, and to somewhere between US$160 and US$170 billion by 2015 (OECD, 2007a, 2007b).