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Targeting Aid to the Needy and Deserving: Nothing But Promises?

Kiel Working Paper No. 1229

54 Pages Posted: 1 Nov 2004  

Peter Nunnenkamp

University of Kiel

Gustavo J. Canavire Bacarreza

Universidad EAFIT - School of Economics and Finance - Center for Research in Economic & Finance (CIEF); Universidad EAFIT; IZA Institute of Labor Economics

Luis Triveno

Kiel Institute for World Economics - Advanced Studies Program

Multiple version iconThere are 2 versions of this paper

Date Written: October 2004

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.

Keywords: Bilateral aid, multilateral aid, poverty, economic policy assessment, quality of institutions

JEL Classification: F35

Suggested Citation

Nunnenkamp, Peter and Canavire Bacarreza, Gustavo J. and Triveno, Luis, Targeting Aid to the Needy and Deserving: Nothing But Promises? (October 2004). Kiel Working Paper No. 1229. Available at SSRN: https://ssrn.com/abstract=611461 or http://dx.doi.org/10.2139/ssrn.611461

Peter Nunnenkamp (Contact Author)

University of Kiel ( email )

D-24100 Kiel
Germany

Gustavo Canavire Bacarreza

Universidad EAFIT - School of Economics and Finance - Center for Research in Economic & Finance (CIEF) ( email )

Carrera 49 No. 7 South - 50
Bogotá
Colombia

Universidad EAFIT ( email )

Medellin
Colombia

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Luis Triveno

Kiel Institute for World Economics - Advanced Studies Program ( email )

D-24105 Kiel
Germany

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