Recipient governments and aid flows

Much of the literature on foreign aid allocation assumes that aid-receiving countries have endless demand for foreign aid. Yet foreign aid flows can bring with them costly conditionalities and negative externalities that recipient countries may wish to avoid. This chapter first reviews theoretical perspectives on how aid agreements are achieved between donors and recipients. It then assesses these theoretical claims against available empirical evidence, using findings from cross-country studies of aid allocation, qualitative case studies of project and program negotiations, and survey data collected among decision makers in aid receiving countries. It concludes with a discussion of the ways in which the recipient side might better be incorporated into the study of both aid allocation and aid effectiveness.