Aid allocation by DAC members in contrast to non-DAC donors

The development assistance field is changing due to the rise of new donors who operate independently from the Organisation for Economic Co-operation and Development’s (OECD) Development Assistance Committee (DAC). Those donors, some of whom until recently received aid themselves, provide aid with allegedly different priorities, interests and motivations. This paper studies whether the aid allocation practices by different donors vary significantly in the targeting of donor interests, recipient need and recipient merit. Data of the OECD and AidData is used to analyse the flows with Probit and Tobit regressions, distinguishing the recipient-selection stage and the aid level stage. The aggregated groups of donors are compared with a Wald test, as well as the non-DAC donors grouped into smaller sections: Arab -, Asian -, Latin -, new-DAC, and European donors. China is tested separately to compare its aid level allocation to other donors, as recent global empirical studies have only tested the gatekeeping stage due to data unavailability. The study finds that the main difference between DAC - and non-DAC donors is found in the strength of the correlations, rather than its negative of positive direction. Interestingly, Arab donors show highly aligned aid allocation patterns with the DAC donors, and the results found argue for differentiation between China and other Asian donors in terms of aid allocation practices.