Abstract
Development assistance is increasingly used to fund the provision of global public goods. This has implications for the assessment of the donors’ motivation for the provision of these funds. Given the non-excludability characteristic of global public goods, the traditional classification of donor interests and recipient needs is not appropriate for analyzing donors’ aid allocation decisions. Funding for the provision of global public goods should not flow to those places with the greatest needs—as assumed by the existing aid allocation literature—but to those where they can be provided most efficiently. After explaining the theoretical rationale behind this claim, we empirically show its implication at the example of aid for climate change mitigation (a global public good). While the control for efficiency-related variables can solve the attribution problem for individual public goods, it is difficult to conceive of appropriate controls at the aggregate level. This represents a major challenge for the aid allocation literature and implies that holding donors accountable for their overall aid portfolio will become more difficult in the future.
Castro, Paula