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

Donors differ in the amount of official development assistance dedicated to poverty reduction. We investigate the causes of variation over time and donors 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 there is a trade-off between the total amount of money given, and the amount of money given to poor countries. The trade-off is similar to the paradox of redistribution of targeting vs. redistribution in rich welfare states. Case-study evidence illustrates how countries have managed this tradeoff.