Does Foreign Aid Target the Poorest?

This paper examines the extent to which foreign aid reaches people at different levels of wealth in Africa. I introduce a method for measuring the sub-national distribution of a country’s population by levels of wealth using household surveys and match this information to data on the location of aid projects from two multilateral donors. Within countries, aid disproportionately flows to regions with more of the richest people. Aid does not favor areas with more of the poorest people. These results suggest that donors are not able to realize their preferences for a pro-poor distribution of aid and that aid is not being allocated effectively to alleviate extreme poverty.