Donor motives and aid effectiveness

Although the impact of development aid depends on the actions of recipient governments, donor motives for giving aid nonetheless have a substantial impact on aid effectiveness for two reasons. First, if aid donors select countries and governments that are likely to use resources well - countries with considerable need and governments committed to address that need - aid is more effective. Second, recipient government beliefs about donor motives determine whether they expect future aid to depend on how well they use current aid and on the policy choices they make. Thus, donor motives shape the incentives recipient governments face and hence the actions they take. This chapter uses this framework to understand the impact of donor motives on aid effectiveness across a range of issue areas drawn from the literature on aid and development, and to critique existing empirical approaches to identifying the impact of aid.