The development paradigm has evolved dramatically over the past decade, with high levels of official development assistance now seen by many recipient countries as a problem to be dealt with over time. While there has always been a view that aid should eventually work itself out of a job, more countries are now voicing their desire to reduce the amount of aid they receive in the medium rather than just the long term.
This paper argues that a classification of countries according to their aid receipts could contribute to that agenda and help donors and recipients monitor changes. High aid levels do not equal aid dependence, which is more complex, but they are a critical factor. We suggest that the ratio of recipient aid to Gross National Income (GNI) is a more relevant measure than the traditional focus on aid as a proportion of donor GNI, symbolised by the 0.7% target.
The Background Note is structured as follows.
- First, it discusses the motivations for classifying countries according to their aid receipts and the relevance of monitoring aid targets from the recipients’ perspective.
- On the basis of this taxonomy, the paper analyses major trends over the past two decades and sheds some light on the composition of the Low Aid Countries (LACs) and High Aid Countries (HACs), groups.
- Finally some caveats in the interpretation of the classification and a future research agenda are discussed.