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Do Donors Target Aid in Line with the Millennium Development Goals? A Sector Perspective of Aid Allocation

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  • Rainer Thiele
  • Peter Nunnenkamp
  • Axel Dreher

Abstract

They analyse the aid portfolio of various bilateral and multilateral donors, testing whether they have prioritized aid in line with the Millennium Development Goals (MDGs). Employing Tobit models that combine sectorally disaggregated aid data with various indicators reflecting the situation of recipient countries with regard to the MDGs, they show that donors differ in the extent to which their sectoral aid allocation is conducive to achieving major MDGs. Some MDGs, notably the fight against HIV/AIDS, have shaped the allocation of aid. However, with respect to other MDGs such as primary education, there is a considerable gap between donor rhetoric and actual aid allocation. This invites the conclusion that the current focus on substantially increasing aid is unlikely to have the desired effects unless the targeting of aid is improved. [Discussion Paper No. 2007/04]
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Suggested Citation

  • Rainer Thiele & Peter Nunnenkamp & Axel Dreher, 2007. "Do Donors Target Aid in Line with the Millennium Development Goals? A Sector Perspective of Aid Allocation," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(4), pages 596-630, December.
    • Handle: RePEc:spr:weltar:v:143:y:2007:i:4:p:596-630
    DOI: 10.1007/s10290-007-0124-x
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    More about this item

    Keywords

    Aid allocation; Millennium Development Goals; sector-specific aid;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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