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Motivation: Donors allocate huge sums for assistance intended for poverty reduction to countries that arguably do not need it. For example, the United States spends more in Jordan—with no extreme poverty—than it does in the six countries with the highest poverty rates in the world combined, including the Democratic Republic of the Congo and Somalia. Prior studies have suggested that if global aid were allocated according to need, it could roughly double its impact on poverty reduction. Purpose: Country need can be broken down into the magnitude of the development challenge and the domestic resources available. This study examines these two components of development need to determine which countries have the greatest need for foreign assistance. Approach and methods: I produce a set of data‐driven observations documenting the magnitude of the challenge and the resources available. I first explore which countries have the highest rates of absolute and multidimensional poverty. I then examine which countries have the ability to redistribute by comparing their poverty gaps with the potential domestic resources available. This produces the marginal tax rate (MTR) required for a country to finance its own poverty eradication. Findings: There is a clear trend in the magnitude of the challenge: low‐income countries (LICs) have the highest poverty rates by far; lower middle‐income countries (LMICs) are more mixed; and upper middle‐income countries (UMICs) have comparatively little extreme poverty, except in a small handful of countries. The implied MTRs required to close a country's extreme poverty gap are excessively high for LICs and most LMICs but easily manageable for most UMICs. This strongly suggests that both the magnitude of the challenge is much greater and the resources available much lower in LICs and LMICs. Policy implications: The policy implication is that LICs and LMICs should be strongly favoured in terms of aid allocation. The two different components of country need point in the same direction and both suggest a strong focus on allocating assistance towards the poorest countries. [ABSTRACT FROM AUTHOR]

Governments have responded to the 2022 Russian invasion by committing substantial aid to Ukraine. This paper investigates this aid on a cross-national basis utilizing differences in economic, political, and geographic characteristics of donor countries. It advances the comprehension of aid allocation to Ukraine and argues that donors' interests heavily influence bilateral aid to Ukraine. Empirically, a two-stage approach serves to identify the main determinants of aid allocation, analyzing both the initial decision to donate and the level of aid generosity. The regression analyses show that wealthier, more populous, more democratic countries as well as those who trade with Russia are more likely to support Ukraine while the impact of these factors is more nuanced when determining aid generosity. Ceteris paribus, EU and NATO members are more likely to donate and more generous in their aid efforts. The results also shed light on the complex role of former Soviet republics. [ABSTRACT FROM AUTHOR]

The objective of this paper is to develop a prescriptive model for the inter‐country allocation of aid for COVID‐19 support. Aid allocations are increasing functions of three dimensions of need: (i) hazard and exposure to COVID‐19; (ii) vulnerability to COVID‐19 impacts; and (iii) the capacity to cope, subject to an aid budget constraint. COVID‐19 support from official donors to all ODA eligible countries is modeled. Aid allocations for COVID‐19 support prescribed by the model are compared to actual allocations in 2020. Findings from the main model suggest that low‐income countries are over‐represented among the countries that should have received a greater share of the aid for COVID‐19 support. Middle‐income countries tended to receive more donor support for COVID‐19 than amounts suggested by the model. The choice of weights assigned to the dimensions of need is arbitrary but findings are broadly consistent with respect to the use of different weights, alternative measures of support and changes to other parameters of the model. It is recommended that the donor community commit to a transparent needs‐based funding formula when addressing a global pandemic. [ABSTRACT FROM AUTHOR]

Allocation of adaptation aid to the countries most vulnerable to the adverse effects of climate change is a topic that has received increasing attention in global climate governance in recent years. Studies have attempted to explain the role of vulnerability as a determinant of adaptation aid using largely quantitative methods and focusing on recipient characteristics with varying results. I argue that we cannot assess the role of vulnerability in allocation decisions without paying attention to the decision-making process itself. This article examines how the allocation of bilateral adaptation aid to developing countries is shaped by donors’ institutional context, consisting of the institutional identity, institutional beliefs and allocation stages. Through a case study of the allocation process of the German Federal Ministry for Economic Cooperation and Development, I show that these three elements of the institutional context govern how vulnerability is understood and considered in the allocation of adaptation aid.

As NGOs have emerged as arguably the most prominent actors within the global development enterprise, their international activities and presence have grown to represent a key area of inquiry for development scholars. Existing literature on the geographic distribution of development NGOs leans heavily on quantitative analysis, which lends little insight into the deeper motivations behind the location-based decisions that these organizations make; this study uses a qualitative lens to fill this gap, shedding light on the question "Why do NGOs work where they do"? After interviewing representatives from 22 Canadian development NGOs, the research team determined several key catalysts, which shape the geography of these entities. These factors include existing relationships, personal visits, local requests, logistical ease, funder restrictions, documented need, and humanitarian crises. Furthermore, the decision-making framework related to project locations appears to evolve as organizations grow. [ABSTRACT FROM AUTHOR]

The use of non-state actors as channels of aid allocation has been increasingly favoured over the use of government and state agencies. This paper makes use of anecdotal evidence from interviews, focus groups, and surveys in the South-East and South-South regions of Nigeria to explore aid allocation processes with the aim of enhancing the effectiveness of aid, particularly in conflict-affected societies. The findings show that the participants generally prefer bypassing the government in the survey. However, a deeper examination of the interviews and focus groups indicates that bypassing government may not necessarily be the most effective aid allocation process. A hybrid system that essentially involves the government, non-state actors, and particularly the end-users of the aid is encouraged. The findings also indicate that regions with higher levels of instability such as conflict may prefer the allocation of aid via non-state actors than other regions. [ABSTRACT FROM AUTHOR]

Aid allocations choices bilateral donors make can be influenced by the institutional environment of a recipient government and the way this environment is perceived. This study examines bilateral donors’ approaches to their aid allocations in Uganda. Uganda provides an interesting case study since the government’s control over the aid funds decreased considerably over the past decade-with donors significantly tightening aid fungibility while the total aid funds Uganda received increased compared with the previous decade, 2002–2009. The donors seemed to control aid fungibility through aid modalities, sectors and/or channels; most aid was carried out as projects, in health-related sectors and through non-state actors, leaving small leverage for the Ugandan government over the aid funds. These might be the donors’ tactical responses to the cloudy political environment of Uganda by increasing their supervision over the aid funds, instead of cutting them. The largest donor, the United States, mostly shaped the aid portfolio of Uganda showing specific preferences in aid modalities, sectors and channels. Uganda should refine its effort towards an improvement of the national political context. This would increase donors’ confidence and willingness to loosen aid fungibility and lead better use of aid resources.

Partner country (PC) selection lies in the centre of development policy decision‐making of donor countries and institutions, and plays a significant role in shaping aid patterns. This paper proposes a comprehensive analysis contrasting donor intentions in PC selection with actual aid flows. Having analysed selected members of the Development Assistance Committee of the Organization for Economic Cooperation and Development, namely, the European Union, France, Germany, Japan, Netherlands, Sweden, the United Kingdom and the United States of America, we suggest that (1) donors might not only be either altruistic or self‐interested but also motivated by an intention to contribute to the provision of global public goods; (2) self‐interest in aid provision can be an explicitly‐stated strategy, contrary to what has been argued in the majority of the literature, which often treats self‐interest as a non‐stated donor intention; and (3) donors' self‐interested intentions do not always lead to a less development‐oriented donor approach. [ABSTRACT FROM AUTHOR]

The Sustainable Development Goal principle of "leaving no one behind" has led to increased attention being paid to patterns of intra-country allocation of foreign aid. We contribute to these efforts by considering a particular type of foreign aid, Aid for Trade (AfT), to discern allocation objectives of aid. We match a novel, geo-coded, dataset on over 11,000 Bangladeshi exporting firms to over one thousand AfT project locations in Bangladesh similarly geo-coded by AidData and expanded by ourselves. We use this matched data to employ spatial techniques that evaluate political economy logics of aid allocation, wherein AfT is functionally targeted towards exporting firms, is allocated based on prebendalism, and/or is directed to high poverty areas. Our analysis finds support that AfT is allocated based on functional or prebendalist logics. The results for poverty are more nuanced. When considered in a stand-alone fashion, poverty is associated with a smaller likelihood of allocation. However, some evidence suggests that when the other logics are present, the impact of poverty on allocation becomes positive. These findings suggest that the politics of aid allocation is a nuanced and intricate dance with multiple overlapping or competing logics. [ABSTRACT FROM AUTHOR]

Aid allocations choices bilateral donors make can be influenced by the institutional environment of a recipient government and the way this environment is perceived. This study examines bilateral donors' approaches to their aid allocations in Uganda. Uganda provides an interesting case study since the government's control over the aid funds decreased considerably over the past decade-with donors significantly tightening aid fungibility while the total aid funds Uganda received increased compared with the previous decade, 2002–2009. The donors seemed to control aid fungibility through aid modalities, sectors and/or channels; most aid was carried out as projects, in health-related sectors and through non-state actors, leaving small leverage for the Ugandan government over the aid funds. These might be the donors' tactical responses to the cloudy political environment of Uganda by increasing their supervision over the aid funds, instead of cutting them. The largest donor, the United States, mostly shaped the aid portfolio of Uganda showing specific preferences in aid modalities, sectors and channels. Uganda should refine its effort towards an improvement of the national political context. This would increase donors' confidence and willingness to loosen aid fungibility and lead better use of aid resources. [ABSTRACT FROM AUTHOR]

• DAC donors use significantly different criteria to determine eligibility for, versus the amount of, climate finance allocated. • The same criteria which determine eligibility for access, tend to limit the amount of climate finance allocated by DAC donors. • Different types of donors utilize significantly different criteria to determine the amount of adaptation and mitigation finance allocated. • SIDS need dedicated loss and damage funds because long-term adaptation funds are often diverted to immediate post-disaster recovery. • Low-income SIDS with weak capacities are typically ineligible for climate finance, excluded by complex processes, or receive meagre allocations. Empirical studies of the determinants of access to climate finance have coalesced around a broad set of independent variables, including recipient need, merit and adaptive capacity, and donor interest. This paper provides comprehensive and nuanced insights into the allocation of the varied sources of climate finance by providing answers to the following questions: (i) Do the eligibility criteria used by donors to determine which countries receive climate finance differ from the criteria used to determine the amount of finance allocated? (ii) Do the eligibility criteria and determinants of amounts allocated for mitigation aid differ from those for adaptation aid? (iii) Do different kinds of donors determine eligibility for financing and amount of finance allocated in different ways? (iv) Do SIDS receive more (or less) climate finance than is justified by their relative vulnerability and adaptive capacity? The results provide a better understanding of the challenges faced by SIDS in accessing climate financing, highlight an underemphasized bifurcation within this group of countries, and underscore the need for further exploration of suitable types of support and modalities of delivery. [ABSTRACT FROM AUTHOR]

This study identifies whether the quality of recipient countries' economic institutions was a determining factor in the aid allocation practices of donor nations. Three criteria that would influence aid decision were proposed: recipient institutions (economic and political), donor strategic interest, and recipient need. By examining a panel of 109 countries during 2007–2016, our findings suggest that there is a distinct contrast in the patterns of aid allocation between the U.S. and the Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD) regarding institutional factors—economic and political institutions—while demonstrating not much difference in terms of donor interest and recipient need. The economic and political institutions negatively influence the amount of aid commitment only for the DAC donors. We presume that they focus more on ex-post conditionality than ex-ante selectivity criteria when it comes to the level of recipient economic and political institutions. In addition, our finding does not support the argument that the U.S. behaves more strategically in aid giving practices (Lumsdaine, 1993; Noël & Thérien, 1995). The U.S. is less responsive to conflict situations and the colonial history of a recipient than the DAC donors are. [ABSTRACT FROM AUTHOR]

While existing research has suggested that delegating foreign aid allocation decisions to a multilateral aid fund may incentivize recipient countries to invest in bureaucratic quality, our analysis links the fund's decision rules to recipient-country investment by explicitly modeling the decision-making within multilateral aid funds. We find that majority rule induces stronger competition between recipients, resulting in higher investments in bureaucratic quality. Despite this advantage, unanimity can still be optimal since the increased investment under majority comes at the cost of low aid allocation to countries in the minority. The qualitative predictions of our model rationalize our novel empirical finding that, relative to organizations that use a consensus rule, organizations that use majority are more responsive to changes in recipient-country quality. [ABSTRACT FROM AUTHOR]

• Allocation of aid reflects various donor motives. • Evidence that aid promotes growth is limited. • Aid is effective in some areas favored by donors. • Donor motives mediate the effectiveness of aid. A vast literature evaluates the effectiveness of development aid, often reaching sobering conclusions. We argue that a key shortcoming of this literature is the focus on a narrow concept of effectiveness—mostly economic growth—that does not match the kind of effectiveness that aid donors actually aim at. To determine actual donor motives, we first survey the literature on aid allocation and identify a large set of motives that is common to many donors. We then employ this set of donor motives for compiling a survey of the aid effectiveness literature by donor motive. The literature shows that while aid has a moderate effect on economic development at best, it seems effective in achieving many of the other effects primarily intended by aid donors. We conclude by speculating that future research on aid effectiveness will be more likely to identify significant effects of aid when taking donor motives into account. [ABSTRACT FROM AUTHOR]

This paper seeks to bring new insights into the foreign aid allocation behaviour and patterns of two donors from the group of post-communist EU member countries, namely Poland and the Czech Republic. We use quantitative regression analysis to address Polish and Czech foreign aid objectives with a specific emphasis on geopolitical considerations and promotion of democracy. The results reveal a considerable level of similarity between Polish and Czech foreign aid allocation. Both donor countries use foreign aid to safeguard their own geopolitical self-interests—the Czech Republic and especially Poland prioritise post-Soviet countries in their aid allocations. They also prefer recipients in a relative geographic proximity. On the other hand, economic objectives are not significant drivers of Polish and Czech foreign aid. Given the recipients' needs, the middle-income effects are evident in both countries' aid allocations. Although support of democracy is an official objective of both donors, the level of democracy and freedom played a statistically significant role only in the allocation of overall Czech aid. A separated analysis on Polish and Czech democracy aid reveals even stronger biases of democracy aid towards former post-Soviet countries. Our research has also acknowledged the need for a more precise definition of democratic assistance. [ABSTRACT FROM AUTHOR]

This article examines how adaptation aid is allocated across countries, and specifically focus on the role of donor—donor interactions in allocation decisions. We test two contrasting hypotheses: the presence of other adaptation donors in a recipient country may increase or reduce the likelihood of donor i to provide adaptation aid to that recipient. In the former case, donors support adaptation in the same recipient countries; in the latter, they provide their adaptation aid to different recipient countries. We model adaptation aid allocations as a network, and apply an innovative method, bipartite temporal exponential random graph models, to bilateral adaptation aid flows between 2010 and 2016. Our empirical analysis finds strong evidence for donor interactions. The results suggest a positive effect of other donors: donors tend to support adaptation in similar sets of recipient countries. These results provide further evidence that adaptation aid largely follow the structures and processes of traditional development aid, which poses questions for the additionality of finance for adaptation to climate change.

Public support in high-income countries for development cooperation and humanitarian assistance influences the provision of Official Development Assistance (ODA) to fight global poverty and improve conditions in low-income countries. This research examined public attitudes in Iceland toward ODA, with the aid provided by the Icelandic government in September 2014 to fight the Ebola epidemic in West Africa as a case in point. Specifically, it examines which characteristics relate to having negative attitudes towards the assistance, and what reasons the public believe influenced the decision to provide aid. A questionnaire about attitudes towards the Ebola epidemic was administered to a random sample of 1.500 adults from an internet panel established by the Social Science Research Institute of the University of Iceland, and 920 people answered (61 per cent response rate). A quarter of the respondents expressed negative attitudes towards the humanitarian assistance provided in response to the Ebola epidemic, and development cooperation in general. Those who held negative attitudes were more likely to lean to the right in political orientation and be less educated. The majority of the public believed ethical reasons influenced the decision to provide humanitarian assistance. Respondents with negative attitudes towards the aid were more likely to believe that self-interest influenced the decision to provide aid; yet, a survey with an experimental design is needed to elucidate this issue further. Governments should ensure that development cooperation and humanitarian assistance are based on ethical considerations, in addition to educating the public about development processes, to increase positive attitudes towards foreign aid. [ABSTRACT FROM AUTHOR]

This paper compares the allocation of private humanitarian aid to that of official humanitarian aid awarded to 140 recipient countries over the 2000–2016 period. We construct a new database that offers information on the country in which the headquarters of private donors are located to test whether private aid tends to follow the humanitarian aid allocation pattern of the respective official donor. Our empirical results confirm that private humanitarian aid tends to "follow the flag". This finding is robust against the inclusion of various fixed effects, estimating instrumental variables models and disaggregating private humanitarian aid into corporate aid and NGO aid. Donor country‐specific estimations reveal that private humanitarian aid from China, Sweden, the United Kingdom and the United States tend to "follow the flag". [ABSTRACT FROM AUTHOR]

Are South Korean official development assistance (ODA) disbursement determinants different by sectors? The majority of existing studies have focused on either aggregate total ODA flows or regional distribution, although motivations for ODA allocation could differ by sector. Using a panel data set of 127 recipient countries over 16 years, this study investigates the determinants of Korea's ODA allocation, especially grants, across five main sectors - specifically, education, health, public administration, technology, and agriculture. We find that the sectoral ODA allocation is generally determined by various factors and their impacts vary across sectors. It should be noted, however, that 'the total ODA volume' and 'the status of Korea's priority country' show consistently positive coefficients regardless of sectors. Moreover, it was found that this effect continues to have a powerful impact even after Korea became an OECD Development Assistance Committee (DAC) member. The finding implies that political and strategic factors play a key role in determining the sectoral ODA allocation of Korea. For sectoral ODA disbursement to be further concentrated toward a smaller number of recipient countries, this study suggests that the number of priority countries should be reduced than the status of quo. [ABSTRACT FROM AUTHOR]

We investigate the driving factors of Chinese aid allocation to 44 African countries for the periods 2003–2017. The Poisson pseudo-maximum likelihood (PPML) procedure is applied to estimate the gravity model of aid and loan allocation as it can solve zero-valued observations and heterogeneity problems prevalent in the panel data set. An aggregate indicator is derived for the quality of governance using principal component analysis. We controlled for aggregate Chinese aid and loans separately because a significant share of aid allocation China commits to African countries is repayable long-term loans. Controlling for source and destination countries’ motives of aid and loan allocation, our findings provide evidence that Chinese aid and loan flow to African countries is significantly determined by African countries’ and China’s strategic, economic and commercial factors. The results further examine the importance of China-Africa trade and Chinese FDI, China’s international support and foreign policy considerations in China’s aid and loan allocation policy to African countries. Additionally, it gives a detailed analysis of the aid-institution paradox.

Despite substantial scholarly attention given to aid allocation motives of state agencies and professionalized non‐governmental organizations (NGOs), privately funded grassroots international NGOs (GINGOs), which have rapidly emerged in the global North, have escaped academic analysis. Using an original dataset of 948 Canadian NGOs, this study compares country aid allocation patterns along competing variables of need, merit, self‐interest and convenience between professionalized, mid‐sized independent and grassroots international NGOs. Our results underscore the importance of a disaggregated analysis yet reveal similar aid allocation trends between all three NGO groups and show significant herding behaviour. These findings question the added value of the growing phenomena of GINGOs. © 2020 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

This study uses incentive-compatible techniques to obtain valuations of 14 common poverty reduction interventions from (probable) aid recipients. Recipients' valuations for these interventions are highly heterogeneous both across interventions and across recipients of the same intervention. Valuation for interventions does not correlate with overall poverty or with perceived need for specific interventions, suggesting that targeting individuals with high valuations based on recipient characteristics is difficult. Through simulations, this study assesses how various allocation mechanisms—cash transfers and voting—compare in generating recipient surplus in the allocation of aid. When markets function and constraints on joint private contributions to public goods do not bind, cash transfers generate considerably more recipient surplus than voting. Even when cash transfers cannot enable public goods and some services, they may still outperform voting at very low resource levels. However, as resource levels increase, voting dominates cash transfers from a surplus-maximization perspective. [ABSTRACT FROM AUTHOR]

Although preceding studies on Japan's foreign aid tend to report that Japan's aid policy is receptive to US pressure, it remains unclear which direction the US wishes Japan to assist its aid programs and how bureaucratic politics of Japan reduces the magnitude of US influence. This paper pursues the first attempt to provide a theoretical framework for the direction of US influence on Japan's aid provision and to explore whether its impact varies across different types of aid. I utilize a new dataset on Japan's Official Development Assistance from 1971 to 2009 and employ both ordinary least squares and two-stage least squares regressions to handle the issues of reverse causality and joint decision-making. The combined results of quantitative and qualitative analyses suggest that the US tends to urge Japan to complement its aid efforts rather than to substitute them as substitution will allow Japan to increase its clout in strategically important recipients and the US attempts to minimize this risk by asking Japan to disburse aid in tandem. I also find that the allocation of Japanese grants is more receptive to US pressure than that of loans because the former is left to the discretion of the Ministry of Foreign Affairs that uses external pressure to win bureaucratic turf wars, whereas loans are determined through consultations among multiple agencies with constituencies that prioritize Japan's domestic interests. The findings are robust across different model specifications and different samples. [ABSTRACT FROM AUTHOR]

Energy poverty and unequal access to electricity are critical issues in African countries, underscoring the importance of understanding energy aid, a significant determinant, and its allocation. This study employs a framework of energy justice to investigate the spatial-temporal patterns of energy aid and the Multidimensional Energy Poverty Index (MEPI) over two decades (2001–2020) in four African countries: Nigeria, Tanzania, Ethiopia, and the Democratic Republic of Congo. We first explore the realm of distributive justice by scrutinizing where energy aid concentrates. Then, to tackle the domain of recognition justice, we analyze whether regions in need have benefited from energy aid through a comparison of regional MEPI and aid spending. The results indicate that energy aid is focused toward capital cities or urbanized areas, and analogous patterns are evident in electricity distribution and renewable energy sectors. The persistence of such patterns results in a temporal continuum of regional energy imbalances, with many marginalized groups not receiving sufficient aid. These findings highlight the importance of considering spatial and temporal aspects in pursuing energy justice while advocating for an equitable aid allocation to ensure an energy-just world. [Display omitted] • Distributive and recognition justice issues are evident in energy aid patterns. • Energy aid favors less poor and urban regions, leaving energy poor areas behind. • Underprivileged areas face persistent high levels of multidimensional energy poverty. • Aid strategies need to address equitable distribution based on regional energy needs. [ABSTRACT FROM AUTHOR]

This article examines the role different aid allocation models play not only for conventional development aid but also for two new financial flows, adaptation and mitigation aid. We first test the three models proposed in the literature – recipient need, recipient merit, and donor interests – using the latest available aid data and compare our results with findings of older studies on Africa, and with studies on aid allocation on a global scale. We find that the recipient merit model in more recent years no longer plays a role for development aid allocation in Africa, in line with findings reported globally. In contrast to such global studies, the logic of the donor interest model does not seem to dominate over the recipient need model in the African context, as both are of equal importance for aid allocation decisions. Finally, additionality seems to play a lesser role in Africa than globally. [ABSTRACT FROM AUTHOR]

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Dialogues on global climate policy are increasingly discussing the sustainable energy transition, with Goal 7 of the UN’s Sustainable Development Goals highlighting the importance of affordable and clean energy. This study looks at foreign aid as a carrier of global climate policy and examines donor behaviour in the energy sector. By examining donor behaviour when giving energy aid, one can grasp how the donor community helps recipients achieve a sustainable energy transition. A panel of donor-recipient pairs, covering 29 donors and 99 recipients, was constructed for the period between 1996 and 2013, using data from Organisation for Economic Co-operation and Development Creditor Reporting System (OECD CRS), International Energy Agency (IEA) and World Development Indicators (WDI). The pair-year panel data were empirically analysed using a two-part model to test whether energy aid donors respond to recipients’ needs with regard to renewable energy and residential electricity. The findings demonstrate that donors respond to recipients’ sustainable energy needs, both renewable and residential, when selecting recipients. Moreover, donors tend to increase the amount of aid based on renewable energy needs. The findings also highlight the significant role of international climate policy, as donors have changed their energy aid-giving patterns since the start of the Kyoto Protocol. Contrary to the common belief in the aid-giving literature, this study shows that, with regard to energy aid, donor interests are more weakly related to recipient selection than are recipient needs. Key policy insights Donors are influenced by the residential energy needs of recipients when giving energy aid, which aligns with the Sustainable Development Goals. Donors’ energy aid-giving patterns changed between the periods before and after entry into force of the Kyoto Protocol, highlighting the significant role of international climate change policy. Policy makers and aid practitioners can steer donors to continue to allocate resources to the development of recipients’ energy policy and to help recipients prepare institutional structures to attract private investment in sustainable energy. [ABSTRACT FROM AUTHOR]

Research background: Donors provide development aid from various reasons: while some of them might give aid based on the recipient´s needs, some countries pursue their own agendas with their development programmes. Visegrad Group countries are mostly considered as egoistic donors that try to support security in the East European region and promote their trade. Purpose of the article: This article draws back on the existing literature that focused on the motives behind the Czech development aid and examines influence of both egoistic and altruistic variables to determine which of these variables are important for the selection of countries to the aid portfolio and the allocation of aid funds. The researched variables are: number of asylum seekers, debt to the Czech Republic, Czech exports, unemployment in the developing countries, political and civil rights, and enrolment to the secondary education. Methods: Probit-tobit analysis and a generalized linear model are employed in this paper. Findings & Value added: The results suggest that egoistic economic motives (debt and Czech exports) are important factors for both country selection and aid allocation, while the number of asylum seekers affects only the aid allocation. As per the altruistic reasons, the country selection depends on the unemployment rates, political and civil rights and the enrolment to secondary education. The aid allocation depends also on the unemployment rates, political and civil rights, and the ratio of girls enrolled to the secondary education.

We show that there was a negative correlation between pro-poor aid and inequality in the period before the mid-2000s. This article provides an explanation for this observed relationship. Using panel data on 34 countries for the period 1996-2014, we test the hypothesis that pro-poor aid has an inequality-reducing effect. To demonstrate that the negative correlation is not spurious, we use dynamic panel techniques with alternative specifications. We show that the share of propoor aid has a negative effect on inequality. In addition, we show that the interaction term between the poverty rate and the change in pro-poor aid has a significant effect. These empirical results are consistent with our theoretical predictions. The results imply that aid can reduce inequality by altering the allocation of aid, rather than by increasing the amount of aid. [ABSTRACT FROM AUTHOR]

Abstract The Unites States (US) openly promotes its economic ideology of free-markets through foreign aid. It also regards foreign education in the US as a way of spreading its own ideas and values among the elite in developing countries. US educated aid recipient country leaders may thus receive more US aid, if they share both the cultural values and economic ideology of the US. I test this hypothesis using a panel fixed-effects regression model for 896 leaders and 143 countries over the period from 1981 to 2010. I address self- and donor-selection biases by including leader fixed effects in the regression analysis, in addition to the country and year fixed effects. In result, I find that, on average, the US allocates 30 percent more bilateral aid to US educated leaders with right-leaning political beliefs compared to those with left-leaning political beliefs. Heterogeneity analysis reveals that these findings are driven by right-leaning US leadership. Highlights • US education as means to spread American values and ideas in the world. • Aid recipient country leaders educated in the US receive more US aid, if they embrace the economic ideology of the US. • Panel data on 896 leaders of 143 countries over 20 years is used to test the hypothesis in the paper. • US educated right-leaning foreign leaders receive 30 percent more aid from the US compared to US-educated left leaders. • Heterogeneity analysis reveals that these findings are driven by right-leaning US leadership. [ABSTRACT FROM AUTHOR]

At the 2009 Copenhagen Climate Summit, donors pledged to 'jointly mobilize' $100 billion/year for climate finance by 2020. The Copenhagen Accord and other agreements do not specify who should provide how much of this collective target beyond the general principle of common but differentiated responsibilities and respective capabilities (CBDR&RC), according to which the more responsible a country is for climate change and/or the more capable of paying, the more climate finance it should provide. Two additional burden- sharing mechanisms may explain how much climate finance donors provide: willingness to pay or 'greenness' and self-interest. These mechanisms are tested to determine which best explains current patterns in climate finance commitments by analysing bilateral climate aid. There is evidence for capability--richer countries provide more climate aid. In contrast, responsibility, greenness or self-interest do not induce more climate aid commitments. Better understanding the drivers of climate aid helps to mobilize more climate finance, and advances understanding of (sectoral) aid allocation. [ABSTRACT FROM AUTHOR]

This study explores whether IMF-supported programs in low-income countries (LICs) catalyze Official Development Assistance (ODA). Based on a comprehensive set of ODA measures and using the Propensity Score Matching approach to address selection bias, we show that programs addressing policy or exogenous shocks have a significant catalytic impact on both the size and the modality of ODA. Moreover, for gross disbursements the impact is greatest when LICs are faced with substantial macroeconomic imbalances or large shocks. Results indicate a sharp difference between the responsiveness of multilateral and bilateral donors to programs. While multilateral donors significantly raise their gross and net disbursements to program countries, the aid allocation by bilateral donors, on both a gross and net basis, does not seem to be affected by programs. [ABSTRACT FROM AUTHOR]

Does foreign aid build peace? The answer is of paramount importance for policy makers and practitioners, given that the world's poor are growing increasingly concentrated in conflict-affected countries. Scholars have also demonstrated keen interest, primarily examining the relationship between foreign aid and civil wars. This review takes stock of the existing literature through a survey of key theoretical arguments connecting aid to the onset, dynamics, and recurrence of civil wars. It then articulates a key challenge posed by undertheorization of aid allocation, which is largely nonrandom, making the causal effects difficult to infer. I identify five areas in need of greater attention: microfoundational theoretical assumptions about aid flows; aid in the context of other foreign policy options; explicit articulation of other factors that may mediate or moderate aid's effects; levels of observation and aggregation; and measurement. [ABSTRACT FROM AUTHOR]

Developed countries provide increasing amounts of aid to assist developing countries adapt to the impacts of climate change. How do they distribute this aid? While donors agreed to prioritise “particularly vulnerable” countries, we know from the general aid allocation literature that donors (also) use aid as a foreign policy tool to promote their own economic and political goals. In this paper, we analyse data on bilateral adaptation aid from 2010 through 2015 to assess to what extent adaptation aid is provided in response to recipient need (that is, vulnerability to climate change impacts) as opposed to recipient merit (that is, good governance) and donors’ interests. In contrast to previous research, we find that donors partly take into account vulnerability to climate change. Countries that are physically more exposed to climate change tend to be more likely to receive some adaptation aid and also receive more adaptation aid per capita, as do poorer countries, small island developing states and—to a lesser extent—least developed countries. Countries with lower adaptive capacity, however, do not receive more adaptation aid; instead, donors reward well-governed countries with adaptation aid as well as use adaptation aid to promote their own economic interests. Furthermore, adaptation aid flows very closely follow general development aid flows. The extent to which adaptation aid is new and additional thus remains unclear. [ABSTRACT FROM AUTHOR]

A substantial number of studies on development aid have explored the reasons for donors’ aid allocation decisions, but few studies exist on the educational aid sector, which fail to provide evidence for educational policymakers to evaluate regarding inquiries about allocative efficiency, equal allocation, and rhetoric with regard to international commitments for educational development. This article examines donors’ motivations to provide educational aid using 169 recipient countries between 1995 and 2014. By examining four rational choice models, the results show that donors respond to the recipient country’s needs, particularly regarding gender disparities, and they also favor countries that can use the aid properly. The study does not find evidence that donors pursue their own self-interest or prioritize fragile states. [ABSTRACT FROM AUTHOR]

The increasing importance of donor countries operating outside of the OECD's Development Assistance Committee (DAC) challenges the existing international aid architecture. In particular, non-DAC donors are suspected to provide aid solely based on self-interest without caring about recipients' need and merit. In this paper, we empirically investigate the aid allocation of one major non-DAC donor, Brazil. We find that Brazil's development cooperation is still predominantly shaped by historic and cultural ties to the Lusophone world and Latin America, while broader political and economic motives play a negligible role. To some extent, Brazil also takes recipients' need and governance into account. This broadly corroborates previous results for China and India, strengthening the conclusion that non-DAC donors are not as different from DAC donors regarding their aid motives as one might suspect. Copyright © 2017 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Summary This paper considers why and how the Performance Based Allocation (PBA) used in multilateral development banks and in particular at IDA, could be improved by taking the structural handicaps of eligible countries into account. The PBA relies on a debatable definition of performance. It does not meet the equity concern raised by the existence of structural handicaps to growth. It neglects the lessons of the aid effectiveness literature. Finally, it suffers from some opacity. We show how it is possible to increase the share of specific groups of countries, such as Sub-Saharan Africa or post-conflict states, in a transparent manner. [ABSTRACT FROM AUTHOR]

Summary Performance-based aid allocation systems are used by a number of multilateral agencies to allocate aid among developing countries. A number of bilateral agencies also allocate aid on the basis of the performance of recipients, albeit in a less systematic way than these multilateral agencies. This paper points to a number of fundamental problems associated with performance-based aid allocation systems, including a problematic balancing of need and performance criteria, being reductionist with respect to the drivers of effective aid and not being sufficiently nuanced with respect to performance by ignoring a lack of human capital and economic vulnerability in recipient countries. Together with providing a theoretical framework that articulates these issues, this paper introduces and outlines the papers that follow in this Special Section. [ABSTRACT FROM AUTHOR]

Summary This paper addresses the impact of aid supply on aid effectiveness. First, we review theoretical literature that deals with the problem of governance in donor–recipient relationships and are susceptible of highlighting effects of aggregate aid availability. Second, we provide a conceptual framework that explicitly incorporates a trade-off between considerations of needs and governance. We examine the impact of aid supply on the manner in which a donor agency allocates the available money between countries differing in terms of both needs and domestic governance. The central conclusion is that a donor’s utility function that embodies the need-governance trade-off and the associated optimization mechanism yield a meaningful rule to guide inter-country allocation of aid resources. [ABSTRACT FROM AUTHOR]

Summary Developing country performance with respect to economic policies and institutional behavior is a common criterion for the allocation of aid among recipient countries. This paper examines how performance is used, arguing that performance is too narrowly defined. A more appropriate definition is one that controls for the economic vulnerability and human capital of developing countries. Econometric analysis of cross-section and panel data is presented that supports this contention. The paper also contends that performance and exogenous economic shocks are likely to be pro-cyclical. This implies a double punishment when aid is allocated according to performance. Evidence of such punishment is also provided. The paper concludes by arguing that economic vulnerability and human capital variables should augment performance measures in aid allocation decision-making. [ABSTRACT FROM AUTHOR]

Wealthy countries spend increasing amounts of aid to support adaptation to climate change in developing countries and have committed under the UN Framework Convention on Climate Change to prioritize adaptation aid to those 'particularly vulnerable' to climate change. While research has started to track this aid, it has not yet examined its allocation across all donor and recipient countries. We thus do not know to what extent vulnerable countries indeed receive more support for adaptation. We address this research gap and ask: how does this commitment to prioritizing particularly vulnerable countries translate into actual adaptation aid allocation? To what extent do vulnerable countries receive more adaptation aid? We address these questions though a quantitative analysis of data from the Organization for Economic Cooperation and Development on bilateral adaptation aid from 2011 through 2014. In contrast to other studies, we find that vulnerability-or more precisely, vulnerability indicators-matter for adaptation aid allocation. Countries that are more exposed to climate change risks, such as extreme weather events or sea level rise, receive more adaptation aid, both on a per capita basis and as a percentage of all adaptation aid. These results indicate that collectively (even if not at the level of each individual donor) donors align their bilateral adaptation aid allocation with global promises. [ABSTRACT FROM AUTHOR]