The Money-Moving Syndrome and the Effectiveness of

Aid ineffectiveness, defined as the low performance of aid in promoting economic growth and reducing global poverty, is a problem utterly complex, prevalent and unfortunately still unresolved. For decades now, it has generated a huge literature reaching conflicting conclusions as to the justifications of aid, the impact of aid on growth and institutional reforms, and the role of economic and political institutions in aid effectiveness. This book examines in depth one of the potential causes of the low performance of foreign aid; in particular, the role incentive structures within international donor agencies could play in leading to "a push" to disburse money. This pressure to disburse money is termed as the "Money-Moving Syndrome" which exists when the quantity of foreign aid committed or disbursed becomes, in itself, an important objective side by side or above the effectiveness of aid. If the overall objective is to maximize the effectiveness of aid, it would appear essential to enhance the design and objectives of aid resources at the source, i.e., at the stage where the funds originate with donors, before considering the causes tainting aid in recipient countries.