The new aid paradigm: A case of policy incoherence

Introduction At the end of the 1990s there was widespread disappointment with aid and with what aid had achieved. Poverty was still rampant, and growth rates in many poor countries were still low, especially in Sub-Saharan Africa. The lack of coherence with other policies of the rich countries, in particular trade, migration and security policies and the negative effects of the war on drugs are important factors in explaining the possible lower aid effectiveness. This paper, however, focuses on the lack of coherence within aid policies, and examines in particular the new aid paradigm that was adopted around the year 2000. The disappointment about what aid had achieved led to several new initiatives at the turn of the millennium. There was broad consensus that aid levels should increase, and that aid should be more focused on poverty reduction. The international community adopted the Millennium Development Goals in order to focus development efforts on achieving concrete results. Several summits confirmed commitments to increase the level of aid, for example the 2002 Monterrey Conference and the 2005 Gleneagles G8 summit. In 1999, the initiative for the Heavily Indebted Poor countries (HIPC) was expanded, making larger amounts of debt relief accessible to more countries.