Political inputs to the aid allocation process: evidence from Spain

Abstract

Rich countries spend about $100 billion a year on poor countries.But details about how this money is spent-and why-is usually unavailable. Even the aggregate figures reported to the public are often of pledges of aid rather than actual amounts spent. Using a detailed data set from Spain, 1999-2003, we explore how at least one rich country has chosen to spend its foreign aid budget, including a closer look at actual projects funded. Moreover, we will attempt to examine the political forces that shaped the allocation of that aid. In particular, we divide political factors into three groups: domestic, regional, and strategic, and find that all three play a role in how much money a poor country receives from donors.