Effective aid and beyond

This paper provides a brief, introductory survey of two types of private flows from Canada to poor countries — remittances and trade — while suggesting improvements to enhance the effectiveness of public aid flows.3 The paper assesses, briefly, the effects of all three types of flows on developing countries and in Canada, as well as Canadian policies in each area. [...] Remittances from Canada to developing countries Canada does not publish official data on remittances.1 Given Canada’s generous immigration program, the existence of temporary worker programs in Canada, and the relationship between migration and remittances, it seems reasonable to assume that remittances from Canada to developing countries are large. [...] This is likely because exports in poor countries tend to be associated with significant job creation in the better-paying formal sector of the economy, especially in activities such as textiles, garments, and footwear, which provide one of the few opportunities for women to earn independent income. [...] Canada’s elimination of such tariffs for least developed countries in the beginning of 2003 gives those countries a head start in the Canadian market before other developing countries would be allowed in barrier-free. [...] There is a large literature but no simple answers for effective aid.6 The evidence, however, suggests that aid can be effective in reducing poverty if, among other things, donors focus and understand the realities of local conditions, and recipient countries have the capacity and leadership to usefully absorb the aid.