Giving Compass' Take:

• As more than a dozen countries transition away from multilateral concessional assistance over the next few years, it is crucial that the shift is as smooth as possible. Many of these countries are not as prepared as their predecessors to successfully make this transition.

• How can the policies around this shift be changed to better support countries in the transition phase? How can private philanthropy help fill in the gaps?

• Find out how aid can do the most good by reading about 7 steps to sustainable global development. 

During the next few years, over a dozen middle-income countries are likely to transition away from multilateral concessional assistance—that is, grants and loans that offer flexible or lenient terms for repayment—including support from International Development Association (IDA) and Gavi, the Vaccine Alliance.

There are good reasons to worry these countries, including Nigeria and Pakistan, will find the transition tough.

The real question is whether the countries are more vulnerable and less ready to transition than countries that previously graduated. And, if they are, should multilateral agencies adjust their transition policies?

To help answer these questions, we compared two groups of countries: a “previous cohort” of countries that have already graduated from IDA over the past decade, and an “upcoming cohort” of countries expected to graduate from IDA, Gavi, or both in the coming years.

Overall, it appears that the countries that graduated from IDA in the previous 2010-2015 period had more capacity to manage the donor transition than that of upcoming graduates. The upcoming cohort seems to have, on average, lower per capita income, greater indebtedness, weaker capacity to efficiently use public resources, more limited and less effective health systems, weaker governance and public institutions, and greater inequality.

Read more about the fate of foreign aided countries by Gavin Yamey and Robert Hecht at Brookings