How Well is Aid Allocated? Descriptive Measures of Aid Allocation: A Survey of Methodology and Results

Abstract

ABSTRACT Although many factors affect which countries actually receive aid, a case can be made for evaluating donor allocative performance with respect to the average income of recipients. A number of indicators are commonly used for such an assessment. Based on criteria developed in this paper, two such indicators — Suits' index and McGillivray's adjusted performance index — are shown to be the most suitable. These indicators are used to compare the performance of bilateral donors: Denmark is found to have the most progressive aid allocation, and the USA the least progressive. The indicators are also used to assess trends in allocative performance for four donors: France, Japan, the UK and USA. There appears to have been a general worsening of allocative performance in the early 1980s, with some improvement in the later part of the decade.