By Tim Harford and Michael Klein
It would be hard to disagree with the objectives of the international aid industry. But how much are donors contributing to their achievement? Despite recent progress, we still know surprisingly little. We know that some donors give much more than others relative to income. We also know that donors are focusing aid less on poor countries and more on countries with strong institutions or good policies. And we know that there appears to be no tradeoff here: the countries that give the most aid also target poor countries and those with good policies. Yet we are still in the dark about which donors, or which projects, are achieving the best results.