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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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    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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