The cracks in the new aid paradigm

Abstract

Over the last five years a new enthusiasm has emerged among donors. Aid volumes have gone up and new modalities and instruments are feverishly experimented with. A new aid paradigm seems to have emerged. Breaking with the bad habits of the past, donors are working on harmonisation, alignment, recipient ownership, new partnerships, all in the spirit of poverty reduction. In this paper it is argued that the new paradigm is a fact. But it is based on a consensus about new modalities and instruments, not about the way they must be used. There are glaring inconsistencies between the PRSP approach and the MDGs, two major components of the new aid agenda. Even more insidious, two schools seem to have emerged on how best to overcome institutional and political failures in aid-dependent low-income countries, two schools that advocate diametrically opposed uses of conditionality. It is argued that these inconsistencies, largely ignored as they are, threaten the success of the new approach.

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