IDEAS home Printed from
   My bibliography  Save this paper

Effective Development Aid : Selectivity, Proliferation and Fragmentation, and the Growth Impact of Development Assistance


  • Takashi Kihara

    (Asian Development Bank Institute (ADBI))


This paper examines several indicators of effective development aid, focusing on the contributions of major bilateral donors. The empirical analyses of selectivity for effective aid delivery revealed that, taking a long-term and regional perspective, some major donors including Japan have been as selective in delivering their aid as some countries well-known for their selective aid delivery, such as Denmark. Japan has provided higher aid for the countries with better policy and governance, and higher grant aid for the countries with lower income, particularly in Sub-Saharan Africa. Indexes for donor proliferation and aid fragmentation, which measure increased transaction costs of recipient countries, were calculated using methods set out in existing studies on the topic, but over the longer term and by region. It is demonstrated that aid from some major donors in Asia, the Pacific, and Europe, including Japan, has proliferated less than the aid programs of most other countries. Official Development Assistance (ODA) provided by Japan since 1990 has been more closely correlated with the growth of GDP per capita of recipient countries than that of other donors. The growth acceleration effects of short-impact aid (SIA) such as aid for infrastructure have been stronger than those of other categories of aid such as aid for education, aid for health, or humanitarian emergency aid. While other major donors reduced the share of SIA in their total ODA in the 1990s and the early 2000s, Japan maintained its share of such aid to sustain the growth of recipient countries. The aid-growth nexus also demonstrates the larger contribution of Japan than those of other major donors to the growth of recipients. Overall, aid from some donor countries, including Japan, that ranked lower in short-term assessments has turned out to be of good quality in the longer run or from regional perspectives, a finding confirmed by recent literature on the quality of aid.

Suggested Citation

  • Takashi Kihara, 2012. "Effective Development Aid : Selectivity, Proliferation and Fragmentation, and the Growth Impact of Development Assistance," Development Economics Working Papers 23194, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:develo:23194

    Download full text from publisher

    File URL:
    Download Restriction: no


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Furukawa, Mitsuaki & Mikami, Satoru, 2014. "Is Country-system-based Aid Really Better than Project-based Aid? Evidence from Rural Water Supply Management in Uganda," Working Papers 64, JICA Research Institute.
    2. Kim, Sang-Kee & Kim, Young-Han, 2016. "Is tied aid bad for the recipient countries?," Economic Modelling, Elsevier, vol. 53(C), pages 289-301.

    More about this item


    development aid; bilateral donors; aid fragmentation; aid-growth nexus; ODA;

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eab:develo:23194. 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: (Shiro Armstrong). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.