Scandinavian Working Papers in Economics

Working Papers in Economics,
University of Bergen, Department of Economics

No 13/17: Losing Concentration? Lessons from a Swedish Aid Policy Reform

Rune Jansen Hagen ()
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Rune Jansen Hagen: University of Bergen, Department of Economics, Postal: Institutt for økonomi, Universitetet i Bergen, Postboks 7802, 5020 Bergen, Norway

Abstract: Sweden is one of the donor countries that signed on to the Paris Agenda, which amongst other things advocated reducing aid dispersion. It also adopted its own geographical concentration policy in 2007. My empirical analysis shows that Sweden only managed to achieve this goal for two years following the reform and that the episode was followed by backsliding. Moreover, its current aid policy framework barely mentions the topic. I argue that a major reason was the failure to institutionalise the policy. This left it vulnerable to the regular politics of aid, which tend to generate both geographic and thematic spread. Reduced peer pressure as the international community has moved away from the Paris Agenda might also have contributed.

Keywords: Foreign aid; Paris Agenda; aid dispersion; Theil Index; Sweden

JEL-codes: F35; F53; H87; O19

28 pages, September 29, 2017

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