Kiel Working Papers, Kiel Institute for World Economics
No 1838:
Needs-Based Targeting or Favoritism? The Regional Allocation of Multilateral Aid within Recipient Countries
Hannes Öhler and Peter Nunnenkamp
Abstract: The regional allocation of aid within recipient countries
has been largely ignored in the aid allocation literature. We use geocoded
data on the location of aid projects financed by the World Bank and the
African Development Bank within a sample of 27 recipient countries to
assess the claim of donors that their aid targets needy population
segments. We also assess whether political leaders in these countries
direct aid funds to their home region, irrespective of regional needs. We
do not find that the multilateral aid institutions take regional needs into
account. Instead, favoritism appears to play an important role for location
choices, in particular for physical infrastructure projects
Keywords: aid allocation, within-country targeting, favoritism, World Bank, African Development Bank; (follow links to similar papers)
JEL-Codes: F35,; F53; (follow links to similar papers)
35 pages, March 2013
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