Lessons from the Past and Sectoral Priorities in Bilateral Official Development Assistance

Abstract

As a donor, the Republic of Korea emphasizes five sectors as primary targets for official development assistance—education, health, governance, agriculture, and industry and energy—which contributed to its own rapid economic growth; that is, the country uses its own development experience as a development assistance model. This study examines the determinants of Korean ODA allocation for each of these sectors. We hypothesize that Korea is likely to allocate more targeted ODA to countries with less achievement in these sectors, and that this tendency is stronger for low-income countries. Using disaggregated Korean ODA allocation data for 2006 to 2015, we find that while the income of recipient countries generally has a significant effect on the allocation of ODA to each sector, the level of development of that particular sector does not appear to have systematic effects on allocations. This null finding may be due to the lack of coordination among the country’s many ODA institutions and the alignment of ODA with the demands and preferences of the recipient countries.