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Aid Effectiveness and Donor Motives

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  • Dreher, Axel
  • Lang, Valentin
  • Reinsberg, Bernhard

Abstract

A vast literature evaluates the effectiveness of development aid, often reaching sobering conclusions. We argue that a key shortcoming of this literature is the focus on a narrow concept of effectiveness—mostly economic growth—that does not match the kind of effectiveness that aid donors actually aim at. To determine actual donor motives, we first survey the literature on aid allocation and identify a large set of motives that is common to many donors. We then employ this set of donor motives for compiling a survey of the aid effectiveness literature by donor motive. The literature shows that while aid has a moderate effect on economic development at best, it seems effective in achieving many of the other effects primarily intended by aid donors. We conclude by speculating that future research on aid effectiveness will be more likely to identify significant effects of aid when taking donor motives into account.

Suggested Citation

  • Dreher, Axel & Lang, Valentin & Reinsberg, Bernhard, 2023. "Aid Effectiveness and Donor Motives," CEPR Discussion Papers 18417, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:18417
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    2. Esser, Daniel E. & Janus, Heiner, 2025. "Everything, everywhere, all at once? Donor bureaucrats struggle with four dimensions of development effectiveness," World Development, Elsevier, vol. 191(C).
    3. Opršal, Zdeněk & Nováková, Tereza & Harmáček, Jaromír & Pánek, Jiří & Avdić, Boris, 2025. "Foreign aid in a divided country: Subnational aid allocations in post-conflict Bosnia and Herzegovina," World Development, Elsevier, vol. 195(C).
    4. André, Pierre & Maarek, Paul & Tapo, Fatoumata, 2025. "Can donors prevent aid misallocations? Evidence from Chinese and World Bank aid," World Development, Elsevier, vol. 186(C).
    5. Kim, Sung Eun & Park, Jong Hee & Rhee, Inbok & Yang, Joonseok, 2025. "What do aid recipients want? Public attitudes toward foreign aid in developing countries," World Development, Elsevier, vol. 186(C).
    6. Perrotta Berlin, Maria & Lvovkskyi, Lev, 2025. "Russia’s Involvement on the African Continent and its Consequences for Development: The Aid Channel," SITE Working Paper Series 64, Stockholm School of Economics, Stockholm Institute of Transition Economics.
    7. Lynam, John & Byerlee, Derek & Moock, Joyce Lewinger, 2024. "The organizational challenge of international agricultural research: The fifty-year odyssey of the CGIAR," Food Policy, Elsevier, vol. 124(C).
    8. Heinzel, Mirko & Reinsberg, Bernhard, 2024. "Trust funds and the sub-national effectiveness of development aid: Evidence from the World Bank," World Development, Elsevier, vol. 179(C).

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    Keywords

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    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid

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