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Development Cooperation in Times of Crisis$
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José Antonio Ocampo and José Antonio Alonso

Print publication date: 2012

Print ISBN-13: 9780231159661

Published to Columbia Scholarship Online: November 2015

DOI: 10.7312/columbia/9780231159661.001.0001

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Aid, Institutional Quality, and Taxation

Aid, Institutional Quality, and Taxation

Some Challenges for the International Cooperation System

Chapter:
(p.172) Chapter 5 Aid, Institutional Quality, and Taxation
Source:
Development Cooperation in Times of Crisis
Author(s):

José Antonio Alonso

Carlos Garcimartín

Víctor Martín

Publisher:
Columbia University Press
DOI:10.7312/columbia/9780231159661.003.0005

This chapter explores the insufficient progress that has been made in aid effectiveness. Studies reveal that aid dependency is a serious problem that reduces the capacity for resources to have an impact, and also reduces the development possibilities of the affected countries. Moreover, this is a problem that could become worse in the future, as aid tends increasingly to be focused around a reduced number of low-income countries. The means by which the negative effect of aid dependency manifests itself are diverse, negatively affecting the conditions for competitiveness in the economy of the recipient country, along with its capacity to efficiently absorb the resources received and the quality and capacity for accountability of its institutions. While aid does improve the institutional quality of the recipient countries, beyond a determined threshold that effect becomes negative, a result that points to the problem of aid dependency previously highlighted.

Keywords:   aid effectiveness, aid dependency, low-income countries, economy, competitiveness, recipient countries

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