The Millennium Development Goals and Aid Allocation: Which donors give high-quality aid?

This paper evaluates donor performance by using data on aid for 10 sectors that are closely related to the Millennium Development Goals (MDGs). We utilize the MDGs indicators to measure the recipient’s need for aid in each sector and investigate whether donors designate aid for specific sectors in the countries that need it most. Our results suggest that the majority of donors are selective in all the sectors. Not only the Nordic countries but also other large donors are selective and have a clear tendency to allocate more assistance to poor countries.