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Do Donors Target Aid in Line with the Millennium Development Goals? A Sector Perspective of Aid Allocation

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Author Info
Thiele, Rainer
Nunnenkamp, Peter
Dreher, Axel

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Abstract

We analyse the aid portfolio of various bilateral and multilateral donors, testing whether they have prioritized aid in line with the Millennium Development Goals (MDGs). Employing Tobit models that combine sectorally disaggregated aid data with various indicators reflecting the situation of recipient countries with regard to the MDGs, we show that donors differ in the extent to which their sectoral aid allocation is conducive to achieving major MDGs. Some MDGs, notably the fight against HIV/AIDS, have shaped the allocation of aid. However, with respect to other MDGs such as primary education, there is a considerable gap between donor rhetoric and actual aid allocation. This invites the conclusion that the current focus on substantially increasing aid is unlikely to have the desired effects unless the targeting of aid is improved.

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File URL: http://www.wider.unu.edu/stc/repec/pdfs/rp2007/dp2007-04.pdf
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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Papers with number UNU-WIDER Research Paper DP2007/04.

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Length: 30 pages
Date of creation: 2007
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Handle: RePEc:unu:wpaper:dp2007-04

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Related research
Keywords: aid allocation; Millennium Development Goals; sector-specific aid;

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References listed on IDEAS
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. Peter Nunnenkamp & Rainer Thiele, 2006. "Targeting Aid to the Needy and Deserving: Nothing But Promises?," The World Economy, Blackwell Publishing, vol. 29(9), pages 1177-1201, 09. [Downloadable!] (restricted)
  2. C-J. Dalgaard & H. Hansen, 2001. "On Aid, Growth and Good Policies," The Journal of Development Studies, Taylor and Francis Journals, vol. 37(6), pages 17-41, August. [Downloadable!] (restricted)
  3. 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!]
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  4. Axel Dreher & Jan-Egbert Sturm & James Raymond Vreeland, 2006. "Does Membership on the UN Security Council Influence IMF Decisions? Evidence from Panel Data," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  5. David Roodman, 2004. "An Index of Donor Performance," Working Papers 42, Center for Global Development. [Downloadable!]
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  6. Abu-Ghaida, Dina & Klasen, Stephan, 2004. "The Costs of Missing the Millennium Development Goal on Gender Equity," IZA Discussion Papers 1031, Institute for the Study of Labor (IZA). [Downloadable!]
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  7. Robert K. Fleck & Christopher Kilby, 2006. "World Bank Independence: A Model and Statistical Analysis of US Influence," Review of Development Economics, Blackwell Publishing, vol. 10(2), pages 224-240, 05. [Downloadable!] (restricted)
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  8. Craig Burnside & David Dollar, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September. [Downloadable!] (restricted)
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  9. Frey, Bruno S. & Schneider, Friedrich, 1986. "Competing models of international lending activity," Journal of Development Economics, Elsevier, vol. 20(2), pages 225-245, March. [Downloadable!] (restricted)
  10. Jean-Claude Berthélemy, 2006. "Bilateral Donors' Interest vs. Recipients' Development Motives in Aid Allocation: Do All Donors Behave the Same?," Review of Development Economics, Blackwell Publishing, vol. 10(2), pages 179-194, 05. [Downloadable!] (restricted)
  11. Eric Neumayer, 2005. "Is the Allocation of Food Aid Free from Donor Interest Bias?," The Journal of Development Studies, Taylor and Francis Journals, vol. 41(3), pages 394-411, April. [Downloadable!] (restricted)
  12. Feyzioglu, Tarhan & Swaroop, Vinaya & Zhu, Min, 1998. "A Panel Data Analysis of the Fungibility of Foreign Aid," World Bank Economic Review, Oxford University Press, vol. 12(1), pages 29-58, January.
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  14. Henrik Hansen & Finn Tarp, 2000. "Aid effectiveness disputed," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(3), pages 375-398.
  15. McGillivray, Mark, 2003. "Aid Effectiveness and Selectivity: Integrating Multiple Objectives into Aid Allocations," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  16. Berthelemy, Jean-Claude & Tichit, Ariane, 2002. "Bilateral Donors' Aid Allocation Decisions: A Three-dimensional Panel Analysis," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
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  17. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2005. "Governance matters IV : governance indicators for 1996-2004," Policy Research Working Paper Series 3630, The World Bank. [Downloadable!]
  18. Kilby, Christopher, 2005. "Donor Influence in MDBs: the Case of the Asian Development Bank," Vassar College Department of Economics Working Paper Series 70, Vassar College Department of Economics. [Downloadable!]
  19. John Hudson & Paul Mosley, 2001. "Aid policies and growth: in search of the holy grail," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(7), pages 1023-1038. [Downloadable!]
  20. Collier, Paul & Dollar, David, 2002. "Aid allocation and poverty reduction," European Economic Review, Elsevier, vol. 46(8), pages 1475-1500, September. [Downloadable!] (restricted)
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  21. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-63, July.
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  22. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, vol. 64(2), pages 547-570, April. [Downloadable!] (restricted)
  23. Axel Dreher & Nathan Jensen, 2003. "Independent Actor or Agent? An Empirical Analysis of the impact of US interests on IMF Conditions," International Finance 0310004, EconWPA, revised 08 Jan 2004. [Downloadable!]
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  24. Dollar, David & Levin, Victoria, 2006. "The Increasing Selectivity of Foreign Aid, 1984-2003," World Development, Elsevier, vol. 34(12), pages 2034-2046, December. [Downloadable!] (restricted)
  25. Michael Clemens & Steven Radelet & Rikhil Bhavnani, 2004. "Counting Chickens When They Hatch: The Short-term Effect of Aid on Growth," Working Papers 44, Center for Global Development. [Downloadable!]
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  26. Axel Dreher, 2004. "A Public Choice Perspective of IMF and World Bank Lending and Conditionality," Public Choice, Springer, vol. 119(3_4), pages 445-464, 06. [Downloadable!]
  27. Alberto Alesina & Beatrice Weder, 2002. "Do Corrupt Governments Receive Less Foreign Aid?," American Economic Review, American Economic Association, vol. 92(4), pages 1126-1137, September. [Downloadable!]
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  28. Ritva Reinikka & Jakob Svensson, 2004. "Local Capture: Evidence From a Central Government Transfer Program in Uganda," The Quarterly Journal of Economics, MIT Press, vol. 119(2), pages 678-704, May. [Downloadable!] (restricted)
  29. Dreher, Axel & Jensen, Nathan M, 2007. "Independent Actor or Agent? An Empirical Analysis of the Impact of U.S. Interests on International Monetary Fund Conditions," Journal of Law & Economics, University of Chicago Press, vol. 50(1), pages 105-24, February.
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(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. Felicitas Nowak-Lehmann D. & Inmaculada Martínez Zarzoso & Stephan Klasen & Dierk Herzer, 2009. "Aid and Trade - A Donor’s Perspective," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 7, Courant Research Centre PEG. [Downloadable!]
    Other versions:
  2. Ansgar Belke & Ingo Bordon & Inna Melnykovska & Rainer Schweickert, 2009. "Prospective Membership and Institutional Change in Transition Countries," Kiel Working Papers 1562, Kiel Institute for the World Economy. [Downloadable!]
  3. Ansgar Belke & Ingo Bordon & Inna Melnykovska & Rainer Schweickert, 2009. "Prospective NATO or EU Membership and Institutional Change in Transition Countries," Ruhr Economic Papers 0131, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen. [Downloadable!]
  4. Peter Nunnenkamp & Hannes Öhler, 2009. "Aid Allocation through Various Official and Private Channels: Need, Merit and Self-Interest as Motives of German Donors," Kiel Working Papers 1536, Kiel Institute for the World Economy. [Downloadable!]
  5. Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2008. "Does US aid buy UN general assembly votes? A disaggregated analysis," Public Choice, Springer, vol. 136(1), pages 139-164, July. [Downloadable!] (restricted)
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  6. Laura Metzger & Peter Nunnenkamp & Toman Omar Mahmoud, 2008. "Does Corporate Aid Really Help Fighting Worldwide Poverty? A Case Study of Nestlé's Aid Allocation," Kiel Working Papers 1414, Kiel Institute for the World Economy. [Downloadable!]
  7. Matteo Tondini, 2009. "Justice Sector Reform in Afghanistan: From a ‘Lead Nation’ Approach to a ‘Mixed Ownership’ Regime?," Transition Studies Review, Springer, vol. 15(4), pages 660-673, February. [Downloadable!] (restricted)
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