Working Paper
85

Why does aid not target the poorest?

Date Published

Jul 31, 2019

Authors

Ryan C. Briggs

Publisher

Citation

Briggs, R. (2019). Why does aid not target the poorest? AidData Working Paper #85. Williamsburg, VA: AidData at William & Mary.

Announcement

Foreign aid projects typically have local effects, so if they are to reduce poverty then they need to be placed close to the poor. I show that, conditional on local population, World Bank (WB) project aid targets richer parts of countries. This relationship holds over time and across world regions. I test five explanations for pro-rich targeting using a pre-registered conjoint experiment on WB task team leaders (TTLs). TTLs perceive aid-receiving governments as most interested in targeting aid politically and controlling implementation. They also believe that aid works better in poorer or more remote areas, but that implementation in these areas is uniquely difficult. These results speak to debates in distributive politics, international bargaining over aid, and principal-agent issues in international organizations. The results also suggest that tweaks to WB incentive structures to make ease of project implementation less important may encourage aid to flow to poorer parts of countries.

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