Since the late 1990s a selection on policy approach to aid was advocated such that more aid should be allocated to countries with good policies, but there is little evidence that this has occurred. This paper argues that donors may exercise selectivity over the aid modality. Specifically,...

Since the late 1990s a selection on policy approach to aid was advocated such that more aid should be allocated to countries with good policies. A number of donors accepted this recommendation, including the World Bank, but there is little evidence that this has occurred. Donors, including the...

Focusing on seven bilateral donors over a 25 year period, the paper answers 4 questions related to aid allocation practice. Questions one and two examine allocation differences between donors and time periods. Questions three and four relate to changes in poverty and policy selectivity. To...

This paper addresses the effect of aid loans and grants on tax effort using data for 82 developing countries over 1970–2005. We find no robust evidence for a negative effect of aid (grants or loans) on the tax/GDP ratio, other than a contemporaneous correlation, but find some evidence that the...