Motivations for Bilateral Aid Allocation in Korea: Humanitarian, Commercial, or Diplomatic?

Abstract

This study investigates Korea's motivations for foreign aid allocation, analyzing panel data from over 180 countries for the last 20 years. The results show that Korea's aid allocation reflects both recipient needs and Korea's own national interests but does not consistently consider aid effectiveness. Korean aid is also characterized by its use as an instrument of both summit diplomacy and resource security. In addition, its commercial motivations appear to have shifted over time, from export promotion to overseas investment support. Despite internal and external pressures, there is no obvious evidence that Korea's allocation rule converges with international guidelines that recommend greater consideration of recipient needs and aid effectiveness and less consideration of donor interests.