Fairness in the international allocation of development aid

Abstract

AbstractThis paper assesses the allocative performance of foreign aid donors. It does so by identifying the consistency of the share of donor aid allocated to each developing country with these their shares of global poverty. A given donor's allocative performance is maximised if the share of its aid to each developing country exactly equals its share of global poverty. This is equated with fairness in the international allocation of aid. The allocative performance of all donors, all bilateral donors, all multilateral agencies, all non‐DAC donor countries, the EU, France, Germany, Japan, the United Kingdom and the United States for the years 2010–15 is assessed. The best performance is exhibited by all bilateral donors, while that for an individual donor is exhibited by the United Kingdom. Non‐DAC donors exhibit the worst performance. The paper also identifies which developing countries receive the most and least aid relative to their shares of global poverty.