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Aid Allocation across Sectors: Does aid fit well with recipients' development priorities?

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  • KASUGA Hidefumi

Abstract

This paper investigates whether aid flows to developing countries fit well with their development priorities. In particular, we examine aid allocation across sectors in a given recipient country by using sectoral data on aid and indicators that measure the recipient's need for aid in each sector. The data show that inter-recipient aid allocation reflects the recipient's need. However, we found no evidence that inter-sectoral allocation fits with national priorities except in high- and middle-income East Asian countries. Our evidence shows that the quality of bureaucracy and corruption in recipient countries impede efficient inter-sectoral allocation.

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  • KASUGA Hidefumi, 2008. "Aid Allocation across Sectors: Does aid fit well with recipients' development priorities?," Discussion papers 08039, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:08039
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    File URL: https://www.rieti.go.jp/jp/publications/dp/08e039.pdf
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    Cited by:

    1. Van Der Sluis, E. & Durowah, O., 2018. "Aid for Trade and Foreign Direct Investment: Effects on Poverty Reduction," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277307, International Association of Agricultural Economists.

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