“The true test of aid effectiveness is improvements in people’s lives.” But people’s lives depend on many things other than aid. Improvements take time, and the lags between aid interventions and improvement in lives are uncertain and different for different kinds of aid. Many donors are likely to be active in a country at any particular time, making it hard to attribute results to aid interventions by specific agencies, except over long periods. Perhaps most important, the effectiveness of aid depends on all those involved in planning and executing aid projects, including the recipient government.
When an aid project fails, it may be because of poor performance by the donor or poor performance by the recipient, or both. Given these difficulties in relating aid to development impact on the ground, the scholarly literature on aid effectiveness has failed to convince or impress those who might otherwise spend more because aid works (as in Sachs 2005) or less because aid does not work often enough (Easterly 2003).