Friday, September 05, 2008

Aid: refining the cap

A comment at the end of our recent post "Should donors cap aid in Africa?" is worth repeating in a separate blog, as part of the debate.

"I agree with the thrust of the proposal to limit aid inflows. It needs refinement though (i.e. what about countries just emerging from civil war, perhaps temporary - really temporary - higher flows could be allowed until tax takes pick up). But (it) would change the incentives/debate in an interesting way, as Adrian Wood suggests.

This proposal should certainly be debated among NGOs and policy makers. The aid dependency issue has not been discussed enough, but is coming up again in a big way. See, for example, 3 new or forthcoming books here.

The lack of major results at the current Accra High Level Forum on Aid Effectiveness may yield increasing aid despondency among some activists, increasing the likelihood that more will shift to alternative agendas, including tax."

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