On December 17, 2007, the World Bank’s Poverty Reduction and Economic Management Network and the Development Economics Vice Presidency (DEC) hosted a day of workshops at World Bank headquarters in Washington, DC. The event, “PREM-DEC Brainstorming Meeting on Improving the Delivery of Aid: Making Aid More Predictable” focused on improving the delivery of aid and making it more predictable. The objective was twofold: (1) to take stock of what is known about aid predictability, how predictability of aid flows affects country performance and policies, and country-level issues in managing uncertain aid flows and (2) to discuss how the Bank and other donors are contributing to the agenda to improve the reliability of aid resources and which new mechanisms are more promising for ensuring stability of aid.
Zia Qureshi, Senior Advisor in the DEC at the World Bank, introduced the day of workshops by asking and answering the issue of weather predictability matters. He addressed the serious consequences of unpredictability of aid in both the long and short term and mentioned recent research on how countries can best manage aid variability. Danny Leipziger, Vice President and Head of the Poverty Reduction Network at the World Bank, noted that variation can be positive as well as negative.
Shanta Devarajan, Chief Economist in the South Asia Region of the World Bank, chaired the first workshop session. In his opening remarks he warned about possible negative consequences of mechanisms for improving predictability of aid. Maureen Lewis, Acting Chief Economist in the Human Development Network at the World Bank spoke on the impact of aid volatility on service delivery, with a special focus on AIDS and Africa. The first question and answer session followed, and participants addressed such issues as political obstacles and swaps.
Jan Walliser, Sector Manager in the Africa Region of the World Bank, offered some stylized facts about aid predictability, using data to predict what will happen when countries receive more or less aid than expected. He further noted that volatility on its own is not necessarily bad.
Madav Ghinere, Advisor in the Executive Director’s Office for the Government of Nepal, offered his thoughts on aid volatility from the perspective of the government of Nepal, especially with regard to the budget.
A second question and answer session addressed commitments versus disbursements, timing of disbursements, volatility of budget support, and predictability measures.