Donor Transparency and Aid Allocation

Discussion Paper 12/2011, German Development Institute, Bonn

38 Pages Posted: 19 Jul 2010 Last revised: 23 May 2013

See all articles by Jörg Faust

Jörg Faust

German Development Institute (DIE)

Date Written: 2011

Abstract

In recent years, the transparency of foreign aid has received substantial attention among aid practitioners. This analysis shows the impact of political transparency in donor countries on those countries’ formal promotion of aid transparency and on their concrete aid allocation patterns. Political transparency as measured by standard corruption indices not only impacts on the engagement of bilateral donors in the International Aid Transparency Initiative. Differences in political transparency in donor countries also explain a large part of their varying aid selectivity patterns. Donors with higher levels of political transparency allocate aid more according to recipients’ neediness and institutional performance.

This paper formerly appeared under the title: Do Less Transparent Donors Allocate Aid Differently?

Keywords: Foreign Aid, Aid Transparency, Political Transparency, Political Accountability, Donor Policy

JEL Classification: F35, H50

Suggested Citation

Faust, Jörg, Donor Transparency and Aid Allocation (2011). Discussion Paper 12/2011, German Development Institute, Bonn. Available at SSRN: https://ssrn.com/abstract=1644704 or http://dx.doi.org/10.2139/ssrn.1644704

Jörg Faust (Contact Author)

German Development Institute (DIE) ( email )

Tulpenfeld 6
Bonn, 53113
Germany

HOME PAGE: http://www.die-gdi.de

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