Leadership in aid selectivity

The purpose of this study is to shed light on donors’ decision process in their choice of aid recipients, which is still only partly understood. In particular, it is still unclear whether any imitative behaviour within donors’ decision process actually affects the degree of selectivity in their choice of recipients. This study contributes to fill such a gap by assessing whether the selectivity of donors’ aid allocation reflects an imitative behaviour and, if so, who leads the game and how the game has changed over time.

Donors’ selectivity is estimated using the Suits index for the analysis of aid allocations. The evolution of the Suits index is analysed in an autoregressive manner to test whether donors’ selectivity reflects an imitative behaviour.

This study documents a general increase in aid selectivity with regards to poverty, while selectivity according to governance reveals only limited change. The analysis shows how a redistributive process of donor leadership and influential power over aid allocation has been in place over three decades between 1980 and 2010, with the 1990s signing the main phase of transition.

This study contributes to shed light on donor coordination through the identification of leaders and followers among donors in terms of aid selectivity.