The debate on aid effectiveness has largely focused on the impact of aggregate “development assistance” on economic growth or economic development more broadly (Easterly, 2001; World Bank, 1998). As a result, relatively little attention has been paid to how well certain components of foreign aid achieve their stated objectives, such as disaster relief, humanitarian assistance, and food aid. In this paper, we focus on one particularly important component of foreign aid—food aid—and evaluate whether it helps stabilize consumption in recipient countries, and whether it has been targeted to those countries most in need.

The Role of Fiscal Policy