12 Years of Aid Allocation Practice in Korea: Disparities in Accordance with Recipients’ Merits with the Lorenz Curve

다국어 초록 (Multilingual Abstract)

Purpose: This paper has examined whether there is disparity in aid allocation funded by the Korean government and sought to answer a number of salient questions on strategies in practice.
Originality: The previous research on aid allocation tends to explore factors and declares that assistance has been allocated to developing countries, with a focus on the level of recipients’ needs and donors’ domestic interests based on the ‘RN-DI model’, whereas it is expected that the findings on aid allocation based on the RN-DI model have been presented with biased results. Hence, this study attempts to build momentum to analyze if there appear to be disparities in aid allocation based on the ‘Recipient Merit’. Furthermore, using the Lorenz curve, this article aims to pursue its relative simplicity to measure and the ability of the Gini Coefficient to offer a single value of overall equity in aid allocation. Methodology: The framework used to analyze and compare the level of disparities in aid allocation comes from different perspectives: (1) recipients’ needs; (2) donors' interests; and (3) recipients’ merit. It analyzes disparities in aid allocation over a 12-year period (2010–2021) using the three competing frameworks, allowing the relative strategies to be assessed employing the Gini coefficient and Lorenz Curves. Result: The results indicate that the government has provided foreign aid based on recipients' merits, with discrepancies in aid allocation attributable to governance rather than recipients’ needs and the donor’s interests. Indeed, ODA has been allocated with disparities depending on recipient countries’ level of accountability; the less developed the degree of accountability, the greater the disparities in ODA allocation.
Conclusions and Implication: These findings provide impetus for citizens to agree on an increase in assistance by highlighting that the Korean government has opted to create a gap in aid allocation based on governance quality to increase aid effectiveness and prevent the waste of tax.