Development Finance

, ,

  • Development finance, especially foreign aid, has long represented an important instrument for helping low-income countries achieve their development objectives. Yet, at a time when developed countries are facing resource constraints, and when the continued utility of aid is debated in simplistic terms, there is a need for a multi-faceted and prescriptive analysis of the impact of aid on economic development, recipient governments, and donors themselves. Through this programme, the research of the World Institute for Development Economics Research (UNU-WIDER) will address how ideas, institutions, and politics influence the impact of aid along four sub-themes: i) aid effectiveness; ii) changing donor landscape; iii) perspectives and politics of aid in Africa; and iv) prospective changes to aid in Africa. The programme develops several projects to bring rigorous, impartial research to bear on the issue of aid; integrate the views and perspective of developing country researchers and policymakers into the process of producing research; and disseminating the results as widely as possible, in particular to developing country policymakers, the donor community, and across the UN system.


    This programme will be implemented with the African Economic Research Consortium (AERC) and an array of other partners in Africa and elsewhere. Funding for twinning is the major concern.

    Focal Points

    Focal points for this programme are UNU-WIDER Director Finn Tarp, Deputy Director Tony Addison, and Research Fellows Danielle Resnick and Alisa DiCaprio.


    Building on the strength of UNU-WIDER’s past work on development finance, the programme will continue to look at both innovative and more traditional sources of finance for development; and produce material that is addressed to policymakers in the UN, the Bretton Woods Institutions, bilateral donors, as well as country governments and other country stakeholders, including the NGO community. Of major interest is that different sources of financing may be required at different levels of development, including for post-conflict economies. In addition, the research will explore advances in economic measurement techniques around crucial policy issues such as donor effectiveness, environmental policy, trade, and public finance more broadly. UNU-WIDER’s research on foreign aid will study the processes and impacts of foreign aid, including economic development processes and political processes and their impact on development and political decisions. The programme will have strong linkages with the Institute’s other programme activities, including those on climate change, food security and poverty analysis, which will assist in producing a cumulative body of knowledge on issues relevant to donors, recipient governments, and citizens of developing countries.


    This programme will involve new econometric and country-based research in the assessment of aid effectiveness. It will also include studies of the achievement of intermediate socio-economic development goals. Finally, an assessment of the challenges in the global financial system will be carried out.


    The gender dimension is a cross-cutting challenge that will be taken into account throughout UNU-WIDER research projects by participants, project directors, paper authors and others.

    Target Audience

    The main users of this programme are academic researchers, policymakers (national, regional and international levels), aid practitioners and bilateral and multilateral donor agencies, as well as the general public more broadly.

    Intended Impact

    Impact: Influencing policymaking in the United Nations system
    Target: The targeted audience includes international policymakers, as well as the general public more broadly.
    How: This programme will produce new insights to be published in academic journals, policy briefs, and newspaper articles. These will be disseminated both electronically and in print at public meetings, workshops and conferences.

    Impact: Influencing policymaking at the national level
    Target: The targeted audience includes national policymakers, as well as the general public more broadly.
    How: This programme will produce new insights to be published in academic journals, policy briefs, and newspaper articles. These will be disseminated both electronically and in print at public meetings, workshops, and conferences.

    Impact: Rethinking/revisiting existing theories/policies
    Target: The target audience will include academic researchers and teachers and policymakers.
    How: This programme will challenge existing pre-conceived ideas on the links between foreign aid and growth and the need for improved public regulation of financial markets.

    Impact: Capacity development in developed/developing countries
    Target: The target audience includes researchers and policymakers in both developed and developing countries.
    How: This will be achieved through knowledge dissemination and capacity building through research collaborations, conferences and training seminars.

    Research Findings

    This programme will contribute research findings in four broad areas: 1) aid effectiveness, methods and mechanisms; 2) the changing donor landscape; 3) perspectives and politics in Africa; 4) prospective changes in aid in Africa.

    Policy Bridging

    Policy briefs will be elaborated for the core programme outputs, and UNU-WIDER’s new blog and the WIDER Angle e-newsletter will also help bridge. In addition, this programme will implement a long series of seminars and conferences.

    Value Added

    This programme will put UNU in focus as a home for in-depth, high-quality research on issues related to foreign aid and international finance. This will contribute to strengthening non-partisan analysis and policy formulation in light of the global economic crisis.


    Outputs of the programme include research reports, paper presentations at national and international conferences, journal publications, book volumes and training seminars. Dissemination will be through academic outlets and public media.

    Timeline/Programme Cycle

    The programme began on 1 April 2011 and will continue until at least 2014.


    Benchmarks and indicators used to gauge the progress of implementation will be the number and quality of conferences and publications. Mechanisms used to determine whether the programme has successfully fulfilled its purpose will include the frequency of WIDER Angle hits on the website; book sales statistics; downloads of research papers; number of UNU-WIDER staff presentations at seminars and conferences; and staff contributions to professional work in the UN, educational institutions and other international organizations.


    Potential challenges include the tendency for existing views to be highly influenced by ideological preferences that regularly get in the way of science-based discussions and policy formulations. Challenges also include the timely recruitment of new UNU-WIDER staff.

    Expected Duration

    The programme is expected to run for a duration of 45 months, from 1 April 2011 through 30 December 2014.

  • Activities within the Programme will involve cooperation between UNU-WIDER and seven partners:

    • UNU World Institute for Development Economics Research
    • UNU Office at the United Nations, NY
    • United Nations Department of Economic and Social Affairs
    • United Nations Economic Commission for Africa
    • United Nations Research Institute for Social Development
    • World Bank
    • African Economic Research Consortium



  • Title: To be determined
    Author(s): To be determined
    Publication/Output Type: To be determined
    Available at: To be determined
    Publisher: To be determined
    Date Published: 2014

  • Prof. Finn Tarp, Director
    United Nations University
    World Institute for Development Economics Research
    Katajanokanlaituri 6B, 00160
    Helsinki, Finland

    T: +358 9 615-9911
    F: +358 9 6159-9333