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Looking Ahead Optimally in Allocating Aid

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  • Wood, Adrian

Abstract

Summary The Collier-Dollar approach to aid allocation among countries has been less than fully embraced by donors--even those focused on poverty reduction--partly because it conflicts with the approach to aid allocation implied by the Millennium Development Goals. These two approaches are shown to be special cases of a more general model of aid allocation, in which donors care about future as well as current poverty. This model is illustratively applied to data for developing regions. Adding a poverty decline adjustment to the allocation formulae used by donors could resolve the conflict between the two approaches.

Suggested Citation

  • Wood, Adrian, 2008. "Looking Ahead Optimally in Allocating Aid," World Development, Elsevier, vol. 36(7), pages 1135-1151, July.
    • Handle: RePEc:eee:wdevel:v:36:y:2008:i:7:p:1135-1151
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    Cited by:

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    2. Robert Utz, 2010. "Will Countries that Receive Insufficient Aid Please Stand Up?," World Bank Publications - Reports 27572, The World Bank Group.
    3. Carter, Patrick, 2014. "Aid allocation rules," European Economic Review, Elsevier, vol. 71(C), pages 132-151.
    4. Simon Feeny & Paul Hansen & Stephen Knowles & Mark McGillivray & Franz Ombler, 2019. "Donor motives, public preferences and the allocation of UK foreign aid: a discrete choice experiment approach," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 155(3), pages 511-537, August.
    5. Patrick Guillaumont & Phu Nguyen‐Van & Thi Kim Cuong Pham & Laurent Wagner, 2023. "Equal opportunity and poverty reduction: How should aid be allocated?," Review of Development Economics, Wiley Blackwell, vol. 27(1), pages 550-607, February.
    6. Gachet, Adrian Nicholas, 2016. "What is the relation between foreign aid and trade?," MPRA Paper 70861, University Library of Munich, Germany.
    7. Ha Hoang, 2014. "Aid darling and the European Union’s aid allocation policy: the case of Vietnam," Asia Europe Journal, Springer, vol. 12(3), pages 301-324, September.
    8. Lars M. Johansson & Jan Pettersson, 2008. "Tied Aid, Trade-Facilitating Aid or Trade-Diverting Aid?," DEGIT Conference Papers c013_008, DEGIT, Dynamics, Economic Growth, and International Trade.
    9. Sumner, Andy, 2012. "Where Do The Poor Live?," World Development, Elsevier, vol. 40(5), pages 865-877.
    10. Ronald B. Davies & Stephan Klasen, 2013. "Of Donor Coordination, Free-Riding, Darlings, and Orphans: The dependence of bilateral aid on other bilateral giving," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 137, Courant Research Centre PEG.
    11. Sergio Tezanos Vázquez, 2009. "Geopolítica de la ayuda ¿Cómo optimizar el impacto de la ayuda sobre el crecimiento?," Documentos de trabajo sobre cooperación y desarrollo 200903, Cátedra de Cooperación Internacional y con Iberoamérica (COIBA), Universidad de Cantabria.
    12. Bodenstein, Thilo & Kemmerling, Achim, 2015. "A Paradox of Redistribution in International Aid? The Determinants of Poverty-Oriented Development Assistance," World Development, Elsevier, vol. 76(C), pages 359-369.
    13. BenYishay, Ariel & DiLorenzo, Matthew & Dolan, Carrie, 2022. "The economic efficiency of aid targeting," World Development, Elsevier, vol. 160(C).
    14. Patrick Guillaumont & Phu Nguyen-Van & Thi Kim Cuong Pham & Laurent Wagner, 2015. "Efficient and fair allocation of aid," Working Papers of BETA 2015-10, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    15. Bourguignon, François & Platteau, Jean-Philippe, 2025. "Aid allocation with optimal monitoring: Theory and policy," Journal of Development Economics, Elsevier, vol. 172(C).
    16. TEZANOS, Sergio, 2009. "Geopolítica De La Ayuda. ¿Cómo Optimizar El Impacto De La Ayuda Sobre El Crecimiento?," Estudios Economicos de Desarrollo Internacional, Euro-American Association of Economic Development, vol. 9(2), pages 55-88.
    17. Bourguignon, François & Platteau, Jean-Philippe, 2017. "Does Aid Availability Affect Effectiveness in Reducing Poverty? A Review Article," World Development, Elsevier, vol. 90(C), pages 6-16.
    18. Temple, Jonathan R.W., 2010. "Aid and Conditionality," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4415-4523, Elsevier.
    19. Hyun‐Hoon Lee & Donghyun Park & Meehwa Shin, 2015. "Do Developing‐country WTO Members Receive More Aid for Trade (AfT)?," The World Economy, Wiley Blackwell, vol. 38(9), pages 1462-1485, September.
    20. Alan Gelb, 2010. "How Can Donors Create Incentives for Results and Flexibility for Fragile States? A Proposal for IDA," Working Papers id:3233, eSocialSciences.
    21. Feeny, Simon & de Silva, Ashton, 2012. "Measuring absorptive capacity constraints to foreign aid," Economic Modelling, Elsevier, vol. 29(3), pages 725-733.
    22. Ronald B. Davies & Stephan Klasen, 2019. "Darlings and Orphans: Interactions across Donors in International Aid," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(1), pages 243-277, January.

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