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Aid Allocation across Sectors: Does aid fit well with recipients' development priorities?

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  • KASUGA Hidefumi

Abstract

This paper investigates whether aid flows to developing countries fit well with their development priorities. In particular, we examine aid allocation across sectors in a given recipient country by using sectoral data on aid and indicators that measure the recipient's need for aid in each sector. The data show that inter-recipient aid allocation reflects the recipient's need. However, we found no evidence that inter-sectoral allocation fits with national priorities except in high- and middle-income East Asian countries. Our evidence shows that the quality of bureaucracy and corruption in recipient countries impede efficient inter-sectoral allocation.

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File URL: http://www.rieti.go.jp/jp/publications/dp/08e039.pdf
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Bibliographic Info

Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 08039.

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Length: 34 pages
Date of creation: Nov 2008
Date of revision:
Handle: RePEc:eti:dpaper:08039

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