Thinking about Aid Predictability

Abstract

Researchers are giving more attention to aid predictability. In part, this is because of increases in the number of aid agencies and aid dollars and the growing complexity of the aid community. A growing body of research is examining key questions: Is aid unpredictable? What causes unpredictability? What can be done about it? This note draws from a selection of recent literature to bring some clarity to the basic story emerging. The authors start by presenting evidence from the literature on various problems with aid flows. Then authors discuss how researchers use terms like volatility and unpredictability when discussing aid predictability; the suggest that these concepts can be sharpened by introducing two new concepts: expectations and reliability. These new concepts are particularly useful in conceptualizing the problems of unpredictable flows in government budget processes. This approach allows a basic analysis of how timing and different types of aid affect predictability, and the implications for policy making.