Aid for Trade: Making it Effective // Chapter 4: The Global Aid Context: The Challenges of Scaling-Up

- The challenges of scaling-up include: “(1) maintaining a stable macroeconomic framework…[and] (2) improving public financial management while facing increasing disincentives to mobilize domestic resources”.

- LDC’s need to have a plan to absorb the probably increases in aid and aid for trade flows.

- Good development practices and plans are essentially to a healthy absorption.

- Human capital and infrastructure bottlenecks should be addressed early in order to enhance the absorption and increase scaling-up.

- Dutch Disease Effect happens when ”the expected scaling up of aid has renewed concerns about the potential of aid flows to create a real appreciation of the aid recipients currency and thereby dampen the export competitiveness of a country”

Chapter 4