Aid, poverty reduction and the 'new conditionality'

P Mosley, J Hudson, A Verschoor

Research output: Contribution to journalArticlepeer-review

180 Citations (SciVal)


The paper examines the effect of aid on poverty, rather than on economic growth. We devise a 'pro-poor (public) expenditure index', and present evidence that, together with inequality and corruption, this is a key determinant of the aid's poverty leverage. After presenting empirical evidence which suggests a positive leverage of aid donors on pro-poor expenditure, we argue for the development of conditionality in a new form, which gives greater flexibility to donors in punishing slippage on previous commitments, and keys aid disbursements to performance in respect of policy variables which governments can influence in a pro-poor direction.
Original languageEnglish
Pages (from-to)F217-F243
JournalThe Economic journal
Issue number496
Publication statusPublished - 2004


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