| Summary: |
Although there is now a strong commitment to double aid to low-income countries, much work remains to be done to operationalise this in a way that maximises the effectiveness of the doubled aid flow. The quality of aid is as important if not more important than the quantity, and aid either poorly delivered or poorly utilised can lead to negative effects in the recipient country. This article focuses on some of the issues that will need to be resolved if the doubling of aid to Africa is to help propel the continent into self-sustaining growth in a manner compatible with achievement of the Millennium Development Goals (MDGs). The article looks firstly at the consensus that has emerged since 2002 regarding
the way aid should be delivered and used. We refer to this as the Monterrey Consensus. We examine outstanding issues, including those concerning the possible negative returns to aid, problems of absorptive capacity defined in various ways, the modality of aid delivery, and the use of aid to build up foreign-exchange reserves. The next part of the article represents a more radical departure and questions aspects of the consensus itself. The final section offers a conclusion.
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