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

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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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Bibliographic Info

Paper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 06-124.

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Length: 38 pages
Date of creation: Jan 2006
Date of revision:
Handle: RePEc:kof:wpskof:06-124

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Keywords: Aid Allocation; MDGs; Development Aid;

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References

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Citations

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Cited by:
  1. Dreher, Axel & Nunnenkamp, Peter & Thiele, Rainer, 2008. "Does Aid for Education Educate Children? Evidence from Panel Data," Open Access publications from Kiel Institute for the World Economy info:hdl:10419/28827, Kiel Institute for the World Economy.
  2. Anwar, Mumtaz & Rashid, Muhammad Khalid, 2011. "Effectiveness of foreign aid in the light of millennium development goal on the education sector: a case study of Pakistan," MPRA Paper 37141, University Library of Munich, Germany.
  3. Jacky Amprou & Patrick Guillaumont & Sylviane Guillaumont Jeanneney, 2007. "Aid Selectivity According to Augmented Criteria," The World Economy, Wiley Blackwell, vol. 30(5), pages 733-763, 05.
  4. Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2006. "Does US Aid Buy UN General Assembly Votes? A Disaggregated Analysis," KOF Working papers 06-138, KOF Swiss Economic Institute, ETH Zurich.
  5. Anwar, Mumtaz & Rashid, Muhammad Khalid, 2011. "Effectiveness of foreign aid in the light of millennium development goal on the health sector: a case study of Pakistan," MPRA Paper 37142, University Library of Munich, Germany.

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