February 06, 2006
Two new working papers examine problems with aid delivery. In An Aid-Institutions Paradox, Todd Moss, Gunilla Pettersson, and Nicolas van de Walle show how aid can undermine institutional development, particularly in Sub-Saharan Africa. Aid Project Proliferation and Absorptive Capacity, by David Roodman, uses a mathematical model to show how the marginal utility of aid can decline as aid increases and projects proliferate. Both papers suggest possible solutions.