MODELLING AID ALLOCATION: ISSUES, APPROACHES AND RESULTS

Mark McGillivray

Journal of Economic Development, 2003, vol. 28, issue 1, 171-188

Abstract: There is a widespread view that political criteria have received less emphasis in aid allocation since the end of the cold war, with a greater share of aid subsequently being based on developmental criteria. An observed increase in aid effectiveness is attributed to this shift. A reasonably large literature on aid allocation supports this view: a number of influential, widely cited studies conclude that developmental criteria played no role in the 1970s and 1980s inter-recipient aid allocation. This paper argues that the shift is not as significant as commonly thought. It points to a number of methodological weaknesses in the dominant modelling approach used within the literature, showing that more rigorous econometric methods suggest that developmental criteria have had a larger influence on cold war period aid allocation than previously thought. An alternative interpretation of the observed increase in aid effectiveness is provided.

Keywords: Aid Allocation; Donor Interest; Recipient Need; Tobit Models; Regression (search for similar items in EconPapers)
JEL-codes: C12 C21 C24 F34 I31 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:jed:journl:v:28:y:2003:i:1:p:171-188

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