Through an analysis of Ghana’s HIPC Fund, which was established as part of the
Poverty Reduction Strategy Papers (PRSP) process, this paper shows how aidfinanced
efforts to reduce regional inequality in Ghana have failed. Dominant political
elites agreed to policies of regional inequality reduction to access aid funding, but,
once approved, such funds were allocated on quite different criteria in ways that
marginalised the poorest. Analyses here reinforce the growing recognition that
developmental outcomes in most poor countries are not shaped so much by the
design of ‘good’ policies per se, but more importantly by the power relationships
within which policy-implementing institutions are embedded. Aid donors seem unable
to fully grasp this important lesson, and so their capacity to contribute to reducing
regional inequality remains limited.