Read Report Online


The Absorptive Capacity Limit: The point where too much aid becomes bad aid

Absorptive capacity is not fixed – theoretically, it can be improved by successful reform. Absorptive capacity can change if the underlying drivers of absorptive capacity change. An increased capacity to absorb aid can occur for various reasons, such as increased public financial management competencies or less onerous aid delivery methods that impose lower transactions costs on recipient governments.