A pair of CGD papers on aid and institutions recently caught my eye:

In “Do No Harm: Aid, Weak Institutions, and the Missing Middle in Africa,” Nancy Birdsall argues that Africa is better characterized as being in an institutional trap than a poverty trap, and that aid donors need to consider their impact upon recipients’ aid dependency, fiscal management, and government hiring of skilled personnel.

In “An Aid-Institutions Paradox? A Review Essay on Aid Dependency and State Building in Sub-Saharan Africa,” Todd Moss, Gunilla Pettersson, and Nicolas van de Walle summarize literature describing the negative impact of foreign assistance upon long-term institutional development and recommend that donors avoid directly funding poor governments so as to preserve their incentives to build more effective public institutions. Development assistance could instead fund the eradication of endemic diseases, peacekeeping activities, and global public goods.