The US Aid Relationship: A Test of the Recipient Need and the Donor Interest Models

Abstract

The transfer of official bilateral economic aid has become an institutionalized dimension of the relationship between high- and low-income countries. There is, however, considerable confusion about the precise role and foreign policy implications of aid. The paper establishes two explicit models of aid allocation, the recipient need and the donor interest models, which provide different characterizations and explanations of the aid relationship. These models are tested against the distribution of US aid for each of the years 1960–70. Our results provide strong confirmation for the donor interest model, and in general indicate a US aid relationship compatible with the realist image of the international system.