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Is the sectoral aid allocation within countries need-oriented?

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  • Eger, Jens
  • Öhler, Hannes
  • Rudolph, Alexandra

Abstract

The paper focuses on an important dimension of donor aid allocation, which has largely been neglected in the empirical literature: the need orientation of donors when deciding on the sectoral composition of their recipient country portfolios. Employing sector-specific need indicators in logit and zero-one inflated beta estimations our results show that the degree of need orientation of donors depends on the sector. While in the sectors of governance, transport, environment protection, sexually transmitted diseases control including HIV/AIDS and emergency response, the analysis clearly points to a need-based allocation of resources, it is striking that need considerations seem not to play a role in the health and water and sanitation sectors. Remarkably, we find evidence for donor coordination within countries, in that donors took other donors’ sector activities into account when deciding on the sectoral composition of their country portfolios.

Suggested Citation

  • Eger, Jens & Öhler, Hannes & Rudolph, Alexandra, 2018. "Is the sectoral aid allocation within countries need-oriented?," IDOS Discussion Papers 17/2018, German Institute of Development and Sustainability (IDOS).
    • Handle: RePEc:zbw:diedps:172018
    DOI: 10.23661/dp17.2018
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    References listed on IDEAS

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    1. Alesina, Alberto & Dollar, David, 2000. "Who Gives Foreign Aid to Whom and Why?," Journal of Economic Growth, Springer, vol. 5(1), pages 33-63, March.
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    3. Ronald B. Davies & Stephan Klasen, 2013. "Of Donor Coordination, Free-Riding, Darlings, and Orphans: The Dependence of Bilateral Aid on Other Bilateral Giving," CESifo Working Paper Series 4177, CESifo.
    4. Briggs, Ryan C., 2018. "Poor targeting: A gridded spatial analysis of the degree to which aid reaches the poor in Africa," World Development, Elsevier, vol. 103(C), pages 133-148.
    5. Collier, Paul & Dollar, David, 2002. "Aid allocation and poverty reduction," European Economic Review, Elsevier, vol. 46(8), pages 1475-1500, September.
    6. Briggs, Ryan C., 2017. "Does Foreign Aid Target the Poorest?," International Organization, Cambridge University Press, vol. 71(1), pages 187-206, January.
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    Cited by:

    1. Grimm, Sven & Gensch, Mareike Magdalena & Hauf, Johanna & Prenzel, Julia & Rehani, Nitja & Senz, Sarah & Vogel, Olivier, 2018. "The interface between research and policy-making in South Africa: exploring the institutional framework and practice of an uneasy relationship," IDOS Discussion Papers 19/2018, German Institute of Development and Sustainability (IDOS).
    2. Han Na Kim and Jinhwan Oh, 2021. "Sectoral Determinants of Korean Development Assistance: Similar, yet Different?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 46(1), pages 85-105, March.

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