DP18417 Aid Effectiveness and Donor Motives
A vast literature evaluates the effectiveness of development aid and often reaches sobering conclusions. We argue that a key shortcoming of this literature is the focus on a concept of effectiveness - mostly economic growth - that does not match the kind of effectiveness that aid donors actually aim at. To determine actual donor motives, we first survey the literature on aid allocation and identify a large set of motives that is common to many donors. We then employ this set of donor motives for compiling a survey of the aid effectiveness literature by donor motive. We find that while aid has a moderate effect on economic development at best, aid seems effective in achieving many of the effects primarily intended by its donors. We conclude by speculating that future research on aid effectiveness will be more likely to identify significant effects of aid when taking donor motives into account.