A Paradox of Redistribution in International Aid? The Determinants of Poverty-Related Official Development Assistance

Donors differ in the amount of official development assistance that is dedicated to poverty reduction. We investigate the causes for the cross-national and cross-temporal variation by employing both a regression approach with aggregate data on bilateral aid and two short country studies on Germany and the United Kingdom. We find that even after controlling for other explanations there is a tradeoff between the total amount of money given, and the amount of money given to poor countries. The tradeoff is similar to the so-called paradox of redistribution of targeting vs. redistribution in rich welfare states. Case-study evidence illustrates how countries have tried to manage this tradeoff.