Publication

This paper discusses how much additional aid is required to meet the Millennium Development Goal of halving global poverty by 2015, and how this aid should be allocated across countries. It shows that a large increase in aid levels can be justified to meet a target of halving US$1-a-day poverty on a country-by-country basis by 2015. The paper then shows that, even where an increase in existing aid levels can be justified, a much larger number of people could be lifted out of poverty by 2015 if aid was instead allocated on a poverty-efficient basis. The paper argues that a poverty-efficient aid allocation using either the poverty gap or squared poverty gap measure of poverty would be a better approach.