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Making the Most of More Aid

In 2014, for the second consecutive year, official development assistance reached a historic high. But such spending could have a substantially greater impact if it were used to mobilize domestic tax flows and private investment in aid-dependent countries.

PARIS – The effort to eradicate global poverty has never been more intense. In 2014, for the second consecutive year, official development assistance (ODA) totaled a historic high of $135 billion, according to new OECD data. This indicates that advanced economies remain committed to promoting global development, despite their own recent problems.

Add to this total the substantial spending by China, Arab states, and Latin American countries in the form of investments and loans, and it is clear that flows of ODA toward the developing world have reached unprecedented levels. And yet happiness about the headline numbers should not be allowed to obscure opportunities to channel these funds more effectively.

Official aid from donor countries has helped to halve extreme poverty and child mortality, and it has driven progress on many other fronts as well. But it is becoming clear that sustained flows of development aid will not be enough to eradicate extreme poverty by 2030 and implement the new United Nations Sustainable Development Goals, which are to be agreed upon later this year.

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