International Relations Commons^™

The Economic Efficiency Of Aid Targeting, Ariel Benyishay, Matthew Dilorenzo, Carrie Dolan

Political Science & Geography Faculty Publications

How efficient is the targeting of foreign aid to populations in need? A long literature has focused on the impacts of foreign aid, but much rarer are studies that examine how such aid is allocated within countries. We examine the extent to which donors efficiently respond to exogenous budget shocks by shifting resources toward needier districts within a given country, as predicted by theory. We use recently geocoded data on the World Bank’s aid in 23 countries that crossed the lower-middle income threshold between 1995 and 2010 and thus experienced sharp aid reductions. We measure locations’ need along a number …