Need, Merit or Self-Interest - What Determines the Allocation of Aid?
Previous studies into aid allocation have concluded that foreign aid is allocated not only according to development needs but also according to donor self-interest. We revisit this topic and allow for donor as well as recipient specific effects in our analysis. Our results indicate that roughly half of the predicted value of aid is determined by donor specific effects. Of the remaining variation, recipient need accounts for 36 percent and donor selfinterest or about 16 percent. This suggests that the previous literature has overstated the importance of donor self-interest. However, bilateral donors seem to place little importance on recipient merit. Recipient merit, measured by growth, democracy and human rights, accounts for only two percent of predicted aid.
|Date of creation:||2008|
|Contact details of provider:|| Postal: Manor Road, Oxford, OX1 3UQ|
Phone: +44-(0)1865 271084
Fax: +44-(0)1865 281447
Web page: http://www.csae.ox.ac.uk/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:csa:wpaper:2008-19. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Richard Payne)
If references are entirely missing, you can add them using this form.