For efficient use of foreign aid, it should be provided to developing countries through a mixture of discretionary transfers and structural projects. That is the conclusion of research by Dr Mohamed Sraieb, to be presented at the Royal Economic Society''s annual conference at the University of Sussex in Brighton in March 2018.
His study challenges the popular view that cash should be given to well-governed countries, while countries with less developed accountability, and potentially corrupt regimes, should only be given structural aid.
He suggests the reverse should be true, and in fact the less developed countries, which in theory are less able to redistribute money successfully, should be given proportionally more cash, alongside support for smaller projects, while richer, well-governed countries should get less cash and should also be expected to provide partial funding for structural projects themselves (co-financing), rather than expecting outside help for the total cost.
Working with Professor Patrick Legros, Dr Sraieb looks into how individuals and organisations can make sure their donations are spent wisely through improved redistribution of wealth between the rich and the poor in a country. He explains:
''We wanted to look at how a donor, who wants to make a difference in a country by helping it to develop, not just in producing goods and services, but also through redistribution of wealth, can decide which projects to support and the best way to provide help.''
''We find that there isn''t a single solution: providing help in different ways is a crucial element of the effectiveness of aid, perhaps as important as the aid level itself.''
"Altruistic Donors, Development and Redistribution" by Dr Mohamed Sraieb