Aid Distribution and the MDGs

The United Nations and other aid agencies are calling for aid to be more than doubled so that the Millennium Development Goals (MDGs) can be achieved by 2015. Unfortunately, as this paper shows, many important donors currently distribute their aid in ways that are not consistent with the MDGs. It constructs aid concentration curves for four of the quantifiable indicators of the MDGs (monetary poverty, child malnutrition, non-enrolment in primary school, and under-five mortality) for the major bilateral and multilateral donors. A common ranking of donors' aid programmes by these indicators is observed. However, there are major contrasts between the progressivity and regressivity of different donor's aid programmes whatever indicator is used. The UK and World Bank have aid programmes which distribute around twothirds of their concessionary aid to the low income countries. In contrast, the USA and the European Commission spend the majority of their aid budgets in middle income countries. France, Germany, the Netherlands, Japan and the United Nations occupy an intermediate position, distributing between a half and two-thirds of their aid to low income countries but also making substantial disbursements to a few relatively small and well off countries