German Aid Allocation and Partner Country Selection. Development-orientation, Self-interests and Path Dependency

The GDI paper examines official country selection and resource allocation of German aid after the end of the Cold War and embeds the analysis into the broader debate about German foreign policy. Overall, the authors find that neediness and democracy levels of recipients have been guiding principles in both country selection and resource allocation.

Nevertheless, geostrategic considerations and the avoidance of conflict-affected countries have also impacted on country selection but less on resource allocation. Moreover, non-linear estimation techniques identify a relatively high threshold of income levels, below which the poverty orientation disappears – a finding that refines previous studies identifying a middle income-country bias of German aid allocation. Finally, official selection decisions to concentrate aid on a reduced number of countries did not have the intended concentration effect.

2012/07 – German Development Institute/ Deutsches Institut für Entwicklungspolitik (DIE); Authors: Jörg Faust and Sebastian Ziaja