Measures for Measures: Evaluating Judgments of Donor Allocative Performance

Abstract

This paper reviews the various measures which have been used in the recent literature to assess how well donors allocate their aid across countries. We begin by proposing three desirable criteria for a measure of allocative performance, which make limited assumptions. We then show that all existing measures of allocative performance fail to meet these criteria. We go on to propose a new measure that does meet our criteria, and present rankings of the allocative performance of the 23 OECD-DAC bilateral donors on the basis of this measure. The ranking differs quite substantially from those based on existing measures.

Keywords: Aid Allocation, Measures, Indices, Bilateral Donors, Rankings

JEL Classification: F35, D63