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Do Donors Target Aid in Line with the Millennium Development Goals? A Sector Perspective of Aid Allocation

  • Thiele, Rainer
  • Nunnenkamp, Peter
  • Dreher, Axel

We analyse the aid portfolio of various bilateral and multilateral donors, testing whether they have prioritized aid in line with the Millennium Development Goals (MDGs). Employing Tobit models that combine sectorally disaggregated aid data with various indicators reflecting the situation of recipient countries with regard to the MDGs, we show that donors differ in the extent to which their sectoral aid allocation is conducive to achieving major MDGs. Some MDGs, notably the fight against HIV/AIDS, have shaped the allocation of aid. However, with respect to other MDGs such as primary education, there is a considerable gap between donor rhetoric and actual aid allocation. This invites the conclusion that the current focus on substantially increasing aid is unlikely to have the desired effects unless the targeting of aid is improved.

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File URL: http://www.wider.unu.edu/stc/repec/pdfs/rp2007/dp2007-04.pdf
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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number UNU-WIDER Research Paper DP2007/04.

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Length: 30 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:unu:wpaper:dp2007-04
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