Does Aid Contribute to Sustainable Development Goals? Empirical Evidence from a Donor Comparison

Masterarbeit aus dem Jahr 2017 im Fachbereich VWL - Sonstiges, Note: 1,0, Justus-Liebig-Universität Gießen (Lehrstuhl für Monetäre Ökonomie), Sprache: Deutsch, Abstract: ¿No Poverty, Zero Hunger, Good Health, Well-being and Quality Education - these are the first priorities of the Sustainable Development Goals (SDGs) that were launched jointly by all UN Member States on 1 January 2016.¿ The agenda of this agreement contains 17 main goals with a total of 169 targets and is dedicated to improving global living conditions and to address issues of environmental and economical sustainability with a planning horizon through to 2030. Development assistance from economically advanced countries, also referred to as aid, is one of the major means to provide financing for countries with less developed economies that face severe social problems, and which often cannot handle these problems alone.
Previous studies have shown, however, that aid is ineffective and recommend comprehensive restructuring of the common aid practices. Investigations that analyse the pattern of aid flows find, moreover, that granting aid to certain recipient countries cannot only be explained be altruistic motives. They show that several strategic or non-strategic reasons have a high explanatory power for individual donor aid allocation.
Against this background, the present master thesis explores aid effectiveness of distinct bilateral donors. This is achieved by a large-scale panel data analysis applying per-capita economic growth, infant mortality and primary growth as indicators for measuring the contribution of aid to achieving the different SDGs.
The study confirms previous findings that aid is widely ineffective. However, it also shows that aid effectiveness varies considerably between different bilateral donors. Whereas aid from one group of Nordic donor countries proves to correlate significantly positive with growth over various different methods, this cannot be determined for another group consisting of five major industrialised countries.