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Targeting aid to the needy and deserving: nothing but promises?

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  • Nunnenkamp, Peter
  • Canavire-Bacarreza, Gustavo
  • Triveño, Luis

Abstract

By reallocating aid to where it is needed most and where a productive use is most likely, donors could help alleviate poverty in developing countries. The rhetoric of donors suggests that this insight has increasingly shaped the allocation of aid. However, we find little evidence supporting the view that the targeting of aid has improved significantly. Most donors provide higher aid to relatively poor countries, but so far the fight against poverty has not resulted in a stronger focus on recipient countries with particularly high incidence of absolute poverty. Many donors failed to direct aid predominantly to where local conditions were conducive to a productive use of inflows. The response of donors to changing institutional and policy conditions in recipient countries turns out to be fairly weak. In particular, we reject the proposition that multilateral donor institutions provide better targeted aid than bilateral donors.

Suggested Citation

  • Nunnenkamp, Peter & Canavire-Bacarreza, Gustavo & Triveño, Luis, 2004. "Targeting aid to the needy and deserving: nothing but promises?," Kiel Working Papers 1229, Kiel Institute for the World Economy (IfW).
  • Handle: RePEc:zbw:ifwkwp:1229
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    References listed on IDEAS

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    More about this item

    Keywords

    bilateral aid; multilateral aid; poverty; economic policy assessment; quality of institutions;

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid

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