Title
Evidence on changes in aid allocation criteriaEvidence on changes in aid allocation criteria
Author
Faculty/Department
Faculty of Applied Economics
Institute of Development Policy and Management
Research group
Impact of Globalization
Publication type
article
Publication
Washington, D.C.,
Subject
Economics
Source (journal)
The World Bank economic review. - Washington, D.C.
Volume/pages
23(2009):2, p. 185-208
ISSN
0258-6770
ISI
000268332500002
Carrier
E
Target language
English (eng)
Full text (Publishers DOI)
Affiliation
University of Antwerp
Abstract
Have donors changed their aid-allocation criteria over the past three decades toward greater selectivity, a frequently stated goal of the international development community? Using data on how 22 donors allocated their bilateral aid among 147 countries over 19702004, the article finds that after the fall of the Berlin wall in 1989 and especially in the late 1990s, bilateral aid responded more to poverty and the quality of the policy and institutional environment in the recipient countries. Furthermore, the sensitivity of aid allocation to the country's size and its debt burden has declined over time. These results are robust to different samples and model specifications, various econometric techniques, and alternative measures of institutional quality. While the specific factors causing these changes cannot be identifiedthese presumably include geopolitical and economic concerns and the many changes in the international aid architecturedonors still differ greatly in their selectivity. This suggests that further, multifaceted reforms are needed to ensure even greater selectivity of aid.
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