Donor versus recipient preferences for aid allocation: A systematic review of stated-preference studies

As Official Development Assistance (ODA) tops 180 billion USD per year, there is a need to understand the mechanisms underlying aid effectiveness. Over the past decade we have seen some low- and middle-income countries become developed nations with record economic growth. Others remain in development purgatory, unable to provide their citizens with access to essential services. In an effort to improve aid effectiveness, the prescriptive nature of aid, where (typically) Western countries allocate funds based on perceived need or the strategic priorities of donors is being reconsidered in favour of locally-led development, whereby recipient governments and sometimes citizens are involved in the allocation and delivery of development aid. Meeting the preferences of donors (both governments and citizens) has been a longstanding priority for international development organisations and democratically governed societies. Understanding how these donor preferences relate to recipient preferences is a more recent consideration. This systematic review analysed 58 stated preference studies to summarise the evidence around donor and recipient preferences for aid and, to the extent possible, draw conclusions on where donor and recipient preferences diverge. While the different approaches, methods, and attributes specified by included studies led to difficulties drawing comparisons, we found that donors had a stronger preference than recipients for aid to the health sector, and that aid effectiveness could be more important to donors than recipients when deciding how to allocate aid. Importantly, our review identifies a paucity of literature assessing recipient perspectives for aid using stated preference methods. The dearth of studies conducted from the recipient perspective is perplexing after more than 30 years of ‘alignment with recipient preferences’, ‘local ownership of aid’, ‘locally-led development’ and ‘decolonisation of aid’. Our work points to a need for further research describing preferences for aid across a consistent set of attributes in both donor and recipient populations.