AN EXAMINATION OF THE LONG-RUN TRENDS AND RECENT DEVELOPMENTS IN FOREIGN AID

This paper documents trends in official development assistance (ODA) over the last three decades. It examines trends in both aid amounts and the quality of aid. It finds that the real value of ODA has declined during the 1990s following two decades of relative stability. The share of foreign aid to Sub-Saharan Africa has fallen during the 1990s and aid flows to low-income countries have also declined, partly as a result of the diversion of aid flows to transition economies and ¡®trouble spots¡¯. The paper also finds that donor aid programs are thinly spread over many recipients. However, reductions in aid amounts have been accompanied by improvements in the quality of aid. The financial terms of aid have improved and there has been a move towards the untying of aid.