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Sectoral Aid Priorities: Are Donors Really Doing their Best to Achieve the Millennium Development Goals?

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Author Info
Rainer Thiele
Peter Nunnenkamp
Axel Dreher

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Abstract

We analyze the aid portfolio of various bilateral and multilateral donors, testing whether they have prioritised aid in line with the Millennium Development Goals (MDGs). In doing so, we combine sectorally disaggregated aid data with indicators reflecting the situation of recipient countries regarding the MDGs. Our results show that donors differ not only in terms of their overall generosity and the general poverty orientation of aid, but also in the extent to which their sectoral aid allocation is conducive to achieving more specific MDGs such as all children completing a full course of primary schooling, reducing child and maternal mortality as well as reversing the spread of HIV/AIDS. Overall, while some MDGs, e.g., the fight against HIV/AIDS, have shaped the allocation of aid, the sector-specific results reveal that with respect to other MDGs, most notably primary education, there is a considerable gap between donor rhetoric and actual aid allocation. These results invite the conclusion that the current focus on substantially increasing aid in order to turn the tide in trying to achieve the MDGs misses one important point: Unless the targeting of aid is improved, higher aid will not have the desired effects. Our results suggest that at least part of the blame for missing the MDGs falls on insufficient targeting of aid.

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Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1266.

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Length: 36 pages
Date of creation: Jan 2006
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Handle: RePEc:kie:kieliw:1266

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Related research
Keywords: Aid Allocation; MDGs; Development Aid;

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Find related papers by JEL classification:
F35 - International Economics - - International Finance - - - Foreign Aid
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2006. "Does US Aid Buy UN General Assembly Votes? A Disaggregated Analysis," Kiel Working Papers 1275, Kiel Institute for the World Economy. [Downloadable!]
    Other versions:
  2. Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2006. "Does Aid for Education Educate Children? Evidence from Panel Data," Kiel Working Papers 1290, Kiel Institute for the World Economy. [Downloadable!]
    Other versions:
  3. Pablo Selaya & Eva R. Sunesen, 2008. "Does Foreign Aid Increase Foreign Direct Investment?," Discussion Papers 08-04, University of Copenhagen. Department of Economics. [Downloadable!]
  4. Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY & Jacky AMPROU, 2006. "Aid Selectivity According to Augmented Criteria," Working Papers 200616, CERDI. [Downloadable!]
    Other versions:
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