Do foreign aid donors reward recipients for improving gender outcomes?

ABSTRACT

We investigate whether developing nations are rewarded by donor countries and multilateral aid organizations for improving women’s outcomes. If donors reallocate accordingly, their decisions could incentivize developing countries to improve gender outcomes on their own. Using dyadic aid flows over the period 1991–2010, we document that improvements in women’s political rights and participation, as well as economic participation, are associated with increases in bilateral aid receipts. Despite their stated emphasis on women, we do not observe similar reallocations in aid by many multilateral organizations in response to gender outcomes.

KEYWORDS:

• Foreign aid
• women
• bilateral aid
• multilateral aid

JEL CLASSIFICATION:

• F35
• J16
• O11

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ See Duflo (2012).

² Low income includes the countries designated as low income and low-middle income by the World Bank. Although Egypt falls in this group, we exclude it from the analysis because it receives a large amount of politically motivated aid from the US which distorts the analysis.

³ Kuziemko and Werker (2006) among others have found that influential donor countries do affect the aid given by multilateral agencies.