Chapter

The global politics of poverty reduction

Paul Mosley

in The Politics of Poverty Reduction

Published in print March 2012 | ISBN: 9780199692125
Published online May 2012 | e-ISBN: 9780191739286 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199692125.003.0007
The global politics of poverty reduction

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Especially in poorer countries and regions, international financial institutions (multilateral, bilateral, and increasingly international NGOs) have been important in financing the implementation of the pro-poor ideas, policies, and structures described in previous chapters. They have attempted to make their aid more effective – and since the 1990s more pro-poor – by attaching policy conditions to their aid, which is achieved through a combination of liberalization, good governance, and commitment to poverty reduction. This idea forms the basis of the Washington institutions’ Poverty Reduction Strategy documents. However, as this chapter shows, what really matters in practice is not adherence to formal conditionality but trust between international financial institutions and recipients; and this is determined more by personal relationships than by technical performance criteria. In spite of this personalization of the aid relationship, this chapter finds that aid does influence policy (for example, the level of the PPE and PPI indices developed in Chapters 5 and 6) and thereby, in the poorer countries, plays a significant part in reducing poverty. Indonesia, Ghana, Uganda, and Bolivia, and outside the study’s sample also Sri Lanka, Bangladesh, and India, would have had totally different poverty trajectories in the absence of support from the international financial institutions.

Keywords: international financial institutions; IMF; World Bank; aid; conditionality; trust

Chapter.  24593 words.  Illustrated.

Subjects: Economic Development and Growth

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