Inspectie Ontwikkelingssamenwerking en Beleidsevaluatie

Donor support to combat poverty and inequality in Africa

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For decades, after the decolonisation, it appeared that most developing countries were trapped in vicious circles of low economic growth. Since the turn of the century, this picture has been changing a lot. The macro-economic performance of many developing countries and emerging economies has improved. Countries in Latin America, South- and South-East Asia, and Sub-Saharan Africa (SSA) record high growth rates. At the same time, poverty declines at a much slower pace in many low- and middle income countries. There is an increasing awareness that economic growth is a necessary, but not a sufficient condition for poverty reduction. Moreover, economic inequality may hinder economic growth.

Recognition that the poorest groups have not benefitted equally from economic growth in developing countries and that income disparities have widened in industrialised countries has contributed to an academic and political interest in inequality. One of the sustainable development goals (SDGs) is to reduce inequality within and among countries. The first target of this goal is “progressively achieving and sustaining income growth of the bottom 40 percent of the population at a rate higher than the national average”.

In line with the international goals, the Netherlands Minister for Foreign Trade and Development Cooperation also aims at contributing to the objectives of inclusive growth. A question is how Dutch polices may contribute effectively to the realisation of international objectives, especially in combination with an agenda that combines aid and trade.

These Terms of Reference sketch the background and objectives for a study, to be published by IOB, on the potential role of donors on the reduction of inequality and furthering inclusive growth, especially in Sub-Saharan Africa.
 

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