An Equal-Opportunity Approach to the Allocation of International Aid

Humberto Llavador, Universitat Pompeu Fabra
John E. Roemer, Yale University

Abstract

How should international aid be distributed? The most common view is according to some utilitarian formula: in order to maximize the average growth rate of aid recipients or the growth rate of income of the class of recipient countries. Recently, the The World Bank [The World Bank, 1998. Assessing aid, World bank policy research report] has published a study demonstrating the importance of good economic management, within a recipient country, in transforming aid into economic growth. We identify good economic management with effort, and ask, how should aid be distributed to equalize opportunities [among recipient countries] for achieving growth, according to Roemer's theory of equal opportunity [Roemer, J.E., 1998. Equality of Opportunity. Harvard University Press, Cambridge, MA]