Foreign Aid
AID EFFECTIVENESS IN BANGLADESH
IS THE GLASS HALF FULL OR HALF EMPTY?
By
M.G. Quibria*
April 2010
*M.G. Quibria is Professor, Department of Economics, Morgan State University, Baltimore, MD 21239; and Distinguished Fellow, Policy Research Institute of Bangladesh, Dhaka, Bangladesh.
1
PREFACE
The literature on aid effectiveness is rife with controversies. There is a voluminous empirical literature based on cross-country regressions, which has produced more confusions than robust conclusions. In addition, this literature has little or nothing to contribute when it comes to individual countries. Recent years have seen the emergence of a burgeoning empirical literature based on the method of randomization. The method has been criticized for its narrow focus. It cannot tell us “what works’ in development, to design policy, or to advance scientific knowledge about development processes.” It has also been opined that it cannot be the basis for a cumulative research program that might progressively lead to a better understanding of development”. Moreover, it provides little guidance on aid effectiveness at the macro level. However, in the real world, people need to draw conclusions about aid effectiveness and make policies. Given the manifest failures of the so-called rigorous empirical methods to yield useful insights, the present study takes a more qualitative approach to aid effectiveness. Taking Bangladesh as a case, it undertakes an in-depth country study and exploits the available qualitative and quantitative information. This paper uses a qualitative triangulation approach based on the subjective judgments of donors and recipients to assess aid effectiveness in Bangladesh. It focuses on the contributions of three major, high-profile donors: the World Bank, the Asian Development Bank (ADB), and the Government of Japan (GOJ).
The paper begins with a discussion of the importance of foreign aid to Bangladesh as it has evolved over time. This is followed by a
IS THE GLASS HALF FULL OR HALF EMPTY?
By
M.G. Quibria*
April 2010
*M.G. Quibria is Professor, Department of Economics, Morgan State University, Baltimore, MD 21239; and Distinguished Fellow, Policy Research Institute of Bangladesh, Dhaka, Bangladesh.
1
PREFACE
The literature on aid effectiveness is rife with controversies. There is a voluminous empirical literature based on cross-country regressions, which has produced more confusions than robust conclusions. In addition, this literature has little or nothing to contribute when it comes to individual countries. Recent years have seen the emergence of a burgeoning empirical literature based on the method of randomization. The method has been criticized for its narrow focus. It cannot tell us “what works’ in development, to design policy, or to advance scientific knowledge about development processes.” It has also been opined that it cannot be the basis for a cumulative research program that might progressively lead to a better understanding of development”. Moreover, it provides little guidance on aid effectiveness at the macro level. However, in the real world, people need to draw conclusions about aid effectiveness and make policies. Given the manifest failures of the so-called rigorous empirical methods to yield useful insights, the present study takes a more qualitative approach to aid effectiveness. Taking Bangladesh as a case, it undertakes an in-depth country study and exploits the available qualitative and quantitative information. This paper uses a qualitative triangulation approach based on the subjective judgments of donors and recipients to assess aid effectiveness in Bangladesh. It focuses on the contributions of three major, high-profile donors: the World Bank, the Asian Development Bank (ADB), and the Government of Japan (GOJ).
The paper begins with a discussion of the importance of foreign aid to Bangladesh as it has evolved over time. This is followed by a