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On Poverty and the International Allocation of Development Aid

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  • Victor Ginsburgh
  • Juan D. Moreno-Ternero

Abstract

We analyze the role of poverty levels in the allocation of international development aid. We estimate “claims” for each recipient, based on the incidence and depth of poverty in its territory, and explore possible reallocations of the current (overall) official development assistance (ODA) based on those claims. We consider four allocation rules rooted in ancient sources: the Aristotelian proportional rule, two constrained egalitarian rules, inspired by Maimonides, and the Talmud rule. Each of them is grounded on different normative principles, which allows us to assess the recipients’ claims in different ways. Our results indicate that the current allocation of international development aid cannot be supported by any of those rules, which makes us conclude that the allocation of ODA is not truly driven by the goal of eradicating world’s poverty.

Suggested Citation

  • Victor Ginsburgh & Juan D. Moreno-Ternero, 2018. "On Poverty and the International Allocation of Development Aid," Working Papers ECARES 2018-23, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:eca:wpaper:2013/276827
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    References listed on IDEAS

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    1. Moreno-Ternero, Juan D. & Villar, Antonio, 2004. "The Talmud rule and the securement of agents' awards," Mathematical Social Sciences, Elsevier, vol. 47(2), pages 245-257, March.
    2. Abhijit Vinayak Banerjee & Alice H. Amsden & Robert H. Bates & Jagdish Bhagwati & Angus Deaton & Nicholas Stern, 2007. "Making Aid Work," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262026155.
    3. Victor Ginsburgh & Juan D. Moreno‐Ternero, 2018. "Compensation schemes for learning a Lingua Franca in the European Union," The World Economy, Wiley Blackwell, vol. 41(7), pages 1775-1789, July.
    4. Bigsten, Arne & Tengstam, Sven, 2015. "International Coordination and the Effectiveness of Aid," World Development, Elsevier, vol. 69(C), pages 75-85.
    5. Llavador, Humberto G. & Roemer, John E., 2001. "An equal-opportunity approach to the allocation of international aid," Journal of Development Economics, Elsevier, vol. 64(1), pages 147-171, February.
    6. Thomson, William, 2003. "Axiomatic and game-theoretic analysis of bankruptcy and taxation problems: a survey," Mathematical Social Sciences, Elsevier, vol. 45(3), pages 249-297, July.
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    9. Ginsburgh, Victor & Moreno-Ternero, Juan D. & Weber, Shlomo, 2017. "Ranking languages in the European Union: Before and after Brexit," European Economic Review, Elsevier, vol. 93(C), pages 139-151.
    10. Hervé Moulin, 2000. "Priority Rules and Other Asymmetric Rationing Methods," Econometrica, Econometric Society, vol. 68(3), pages 643-684, May.
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    14. Ginsburgh, Victor & Moreno-Ternero, Juan D. & Weber, Shlomo, 2017. "Ranking languages in the European Union: Before and after Brexit," European Economic Review, Elsevier, vol. 93(C), pages 139-151.
    15. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
    16. Juan Moreno-Ternero & Antonio Villar, 2006. "New characterizations of a classical bankruptcy rule," Review of Economic Design, Springer;Society for Economic Design, vol. 10(2), pages 73-84, August.
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    More about this item

    Keywords

    Poverty; Development; Aid; Resource Allocation; Claims;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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