Abstract
This article considers the poverty focus of Swedish bilateral aid from a comparative perspective. Using data on aid disbursements to 106 developing countries between 2010 and 2012, it constructs aid concentration curves for Sweden, three other major bilateral donors and the Development Assistance Committee (DAC). Sweden’s bilateral aid is shown to be less poverty and deprivation focused than the aid programmes of Denmark and the United Kingdom, but more progressive than those of the United States and the DAC. While Sweden does well in targeting its aid to low-income countries, around half of its priority development cooperation partners are small middle-income countries in which relatively few poor or deprived people live. There is therefore scope to improve the poverty focus of Swedish bilateral aid in the future.
Abstract
Cet article examine l’accent que l’aide bilatérale suédoise met sur la pauvreté, dans une perspective comparative. En utilisant des données sur les décaissements de l’aide au développement à 106 pays en développement entre 2010 et 2012, cette étude construit les courbes de concentration de l’aide au développement pour la Suède, trois autres bailleurs bilatéraux importants, et le Comité d’aide au développement (CAD). L’aide bilatérale suédoise se révèle être moins axée sur la pauvreté et sur la fragilité financière que les programmes d’aide au développement du Danemark et du Royaume-Uni, mais plus progressive que l’aide bilatérale des Etats-Unis et du CAD. Bien que la Suède réussisse à cibler les pays à faible revenu pour l’allocation de son aide bilatérale, environ la moitié de ses partenaires prioritaires de coopération au développement est constituée de petits pays à revenu intermédiaire dans lesquels vivent relativement peu de personnes pauvres ou en situation de fragilité financière. Il est donc possible à l’avenir d’améliorer l’accent que l’aide bilatérale suédoise met sur la pauvreté.
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Notes
Following the seminal work of World Bank (1998) and Collier and Dollar (2002) showing that aid is more effective in the presence of ‘good’ policies, there has been considerable debate on whether there should be greater policy selectivity in aid allocation decisions. As we do not consider policy selectivity, this article does not aim to contribute to this debate.
When the cumulative percentage of aid is plotted against the cumulative percentage of the population of developing countries, aid concentration curves are also called ‘aid Lorenz curves’ as in White and McGillivray (1995). The term aid concentration curve is more precise because a Lorenz curve should not cross the leading diagonal.
See Appendix for further information on the calculation and interpretation of the Suits index.
The relatively small share of ODA received by India reflects both the large country effect and the Government of India’s policy to reduce the number of donors it cooperates within recent years.
This part of the curve includes Iraq, which in 2010–2012 received more than three and a half times as much aid from the DAC as China.
Other less populous countries that do not have international poverty estimates are Cuba, Mongolia, Uzbekistan and Zimbabwe plus some small island states in the Caribbean and the Pacific.
In addition, items such as debt relief and loan repayments – which CPA appropriately excludes from aid flows – comprise a very small proportion of Swedish bilateral aid in recent years.
These bilateral donors were selected as relevant comparators by staff of the Swedish Expert Group for Aid.
India is home to more than a third of the moderately poor people in the world, receives negligible amounts of aid from most bilateral donors, and accounts for the long flat segment in most aid concentration curves.
As a consequence, the donor fractionalization index for Sweden, which is 1 minus the sum of squares of the share of total bilateral aid given to each country, increased marginally from 0.965 in 2000–2002 to 0.968 in 2010–2012. This is in line with the trend for most other DAC donors (Easterly, 2007).
These 33 countries include Burkina Faso, whose development cooperation partnership with Sweden is due to end in 2016.
These countries are Afghanistan, Kosovo, Moldova, Myanmar, Somalia, South Sudan, the West Bank and Gaza, and Zimbabwe.
One other lower middle-income country, the West Bank and Gaza, received $185 million of Swedish bilateral aid in these years but cannot be included in Figure 5 because of missing data on monetary poverty.
While a graph with a common set of 92 countries can be produced, it would not be particularly helpful as it would exclude seven of Sweden’s key development cooperation partners (Albania, Belarus, Bosnia and Herzegovina, Serbia, Turkey, Ukraine, and the West Bank and Gaza.)
The mortality aid concentration curves also initially rise less steeply because the shares of child mortality in India and China are much lower than their shares of monetary poverty. In 2011 India accounted for 23.2 per cent of the burden of child mortality but 34.8 per cent of moderate poverty in our 106 study countries. The corresponding percentages for China are 4.3 per cent for child mortality and 15.2 per cent for moderate poverty.
As China is an upper middle income country, this also shifts the vertical line showing the threshold between lower and upper middle incomes to the left in Figure 5.
This is largely a consequence of the amount of bilateral aid that the United Kingdom gives to India and Nigeria, both countries with which the United Kingdom has strong historical ties.
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Acknowledgements
This paper was originally prepared for the 1 September 2014 seminar organised by the Swedish Expert Group for Aid Studies (EBA) in Stockholm. Sincere thanks to Kofi Nyamekye who provided excellent research assistance and to Mats Harsmar for comments on earlier versions of this paper. The views expressed are those of the author.
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Appendix
Appendix
Calculation and Interpretation of the Suits Index
For a continuous distribution, the Suits index may be calculated using the following expression:
where S d is the Suits index for donor d, A i is the cumulative distribution of aid ranked in terms of their per capita incomes, y, and K is the area of right angle triangle bounded by the bottom and right-hand-side axes of the aid concentration curve box and the leading diagonal.
For a discrete distribution (of which the distribution of development assistance across developing countries would be an example), the Suits index can be calculated using the following trapezoid approximation:
where p i is the population share of country i and CA i is the cumulative aid share of country i and all poorer countries. Note that in contrast to some previous papers that have calculated the Suits index (White and McGillivray, 1995) using the trapezoid formula involving ranks, this formula allows for the population shares of different countries to differ substantially.
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Baulch, B. The Poverty Focus of Swedish Bilateral Aid: A Comparative Analysis. Eur J Dev Res 28, 758–775 (2016). https://doi.org/10.1057/ejdr.2015.45
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DOI: https://doi.org/10.1057/ejdr.2015.45