Time at the World Bank
By the end of the millennium, Oxford had finally accepted the idea of academic promotion, so Paul was now a full professor, with Oxford as his permanent home. His one sustained period away from Oxford was as Research Director at the World Bank between 1998 and 2003.
He was instrumental in the expansion of the Bank's range of survey datasets, which had previously focused almost entirely on households, but which now include surveys of firms and public services. His work with Bank colleague David Dollar is one of the most influential contributions to the aid effectiveness literature (see Collier and Dollar 2002, 2004). This literature arouses the emotions of development economists in the same way that climate change arouses the emotions of the rest of the world, and consensus has proved hard to achieve. Nevertheless, Paul's work in this field, emphasising the role of recipient government institutional capacity in determining the impact of aid expenditures, was a key factor in the World Bank's movement away from traditional aid conditionality. Previous work by Dollar and Craig Burnside, examining the cross-country association between per capita GDP growth and aid inflows, had suggested that the positive influence of aid on growth was diminished when governance in the recipient country (as measured by, for instance, the International Country Risk Guide) was poor (see Burnside and Dollar 2000). The Collier- Dollar papers examined this relationship in more detail and worked out the implications for an international allocation of aid allocation designed to minimise poverty across the globe. Of necessity, this allocation involves channelling aid to countries with a relatively high incidence of poverty and relatively good governance, which is good news for Ethiopia but a bleak outlook for the Central African Republic. However, this bleakness was to stimulate later work, described below.5