Table of Contents

Handbook on the Economics of Foreign Aid

Handbook on the Economics of Foreign Aid

Edited by B. Mak Arvin and Byron Lew

It would be fair to say that foreign aid today is one of the most important factors in international relations and in the national economy of many countries – as well as one of the most researched fields in economics. Although much has been written on the subject of foreign aid, this book contributes by taking stock of knowledge in the field, with chapters summarizing long-standing debates as well as the latest advances. Several contributions provide new analytical insights or empirical evidence on different aspects of aid. As a whole, the book demonstrate how researchers have dealt with increasingly complex issues over time – both theoretical and empirical – on the allocation, impact, and efficacy of aid, with aid policies placed at the center of the discussion.

Chapter 17: Donors helping themselves

David Sogge

Subjects: development studies, development economics, economics and finance, development economics, politics and public policy, international relations


It is a truth almost universally acknowledged that a donor with money to spend will do so primarily in pursuit of its own interests. ‘Virtually without exception’, two scholars have stated, ‘the research so far has found that the political and economic interests of donors outweigh the developmental needs or merits of the recipients’ (Hoeffler and Outram, 2011: 240). Yet while the fact of their primacy has been acknowledged, those interests remain out of focus or discreetly off camera. Which interests get what, when and how are seldom identified systematically, assessed or put up for public discussion.1 Instead, attentions and emotions concentrate overwhelmingly on aid’s downstream realms of policies and projects. Even today’s efforts to ‘follow the money’ and promote aid transparency largely ignore interests upstream. Given the primacy of those interests, this structure of attention is bizarrely inverted. It creates deficits in knowledge and obstacles to understanding. There is a challenge here for scholars, and for those wishing to see public accountability required of all actors in aid chains. This chapter has no ambitions to remedy such deficiencies. Rather, it seeks to probe what is known and unknown about aid’s deployment ‘upstream’, and thereby to identify issues that merit deeper scholarly work and perhaps even public investigation.

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