In this paper, we perform a Tobit analysis of aid allocations, covering the period 1999-2002 and accounting for both altruistic and selfish donor motives. We first compare the allocative behavior of all bilateral donors taken together with that of multilateral aid agencies, and then look at nine...

By reallocating aid to where it is needed most and where a productive use is most likely, donors could help alleviate poverty in developing countries. The rhetoric of donors suggests that this insight has increasingly shaped the allocation of aid. We assess the poverty and policy orientation of...

We analyze the aid portfolio of various bilateral and multilateral donors, testing whether they have prioritised aid in line with the Millennium Development Goals (MDGs). In doing so, we combine sectorally disaggregated aid data with indicators reflecting the situation of recipient countries...

The paper examines empirically the proposition that aid to poor countries is detrimental for external competitiveness, giving rise to Dutch disease type effects. At the aggregate level, aid is found to have a positive effect on growth of labour productivity. A sectoral decomposition shows that...

Non-governmental organizations (NGOs) are widely expected to provide better targeted aid than state agencies with a hidden agenda of commercial and political self-interest. However, principal-agent models question that NGOs decide autonomously on aid allocation. Indeed, we show empirically that...