Powerful global trends demand a wholesale rethinking of the system
of international development assistance. A key issue is the future
of concessional aid provided by multilateral development banks.
What should be the future role of MDB concessional aid? And what is
needed to maintain donor countries' support?
In a rapidly changing global environment there is still a strong
case for maintaining MDB concessional aid. But that case only
holds, provided a new approach is taken which adapts the roles of
MDB aid to development lessons of the recent past and changing
global conditions -- and does so in a way that improves aid's
effectiveness.
This study argues that without these conditions, continued donor
country support cannot and should not be expected. The study lays
out a new "framework" for future decision-making of MDB funding,
based on: (1) a new performance-based approach to aid allocations
among countries: (2) an expansion of MDB investments in regional
and global problem solving; (3) the resolution of specific
operational issues that stand in the way of greater effectiveness
in delivery of aid; and (4) changes in the burden-sharing and
governance arrangements of individual MDBs.
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