Kiel Working Papers, Kiel Institute for World Economics
No 1229:
Targeting Aid to the Needy and Deserving: Nothing But Promises?
Peter Nunnenkamp, Gustavo Canavire and Luis Triveņo
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; (follow links to similar papers)
JEL-Codes: F35; (follow links to similar papers)
51 pages, October 2004
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