A 14-country study published by the World Bank in 1998 showed that each extra aid dollar aimed at agriculture, for example, actually decreased total agricultural spending by five cents. This does not mean that donors should never support specific projects. Sometimes the real value of a donor-financed dam or telephone network lies in the technology that is transferred, and the advice given on how to operate and maintain the infrastructure. That is, cash. Rich countries should be much more ruthless about how they allocate their largesse, whether earmarked or not.
Emergency relief is one thing.
But mainstream aid should be directed only to countries with sound economic management. The HIPC debt-relief plans, to their credit, do this. More donors should follow suit. Aid should also favour countries with large numbers of very poor citizens. India, Vietnam, Mozambique and Uganda, among others, meet both conditions.