Recipient Countries’ Financial Development and the Effectiveness of Korean ODA

The purpose of this paper is to empirically investigate the effectiveness of Offcial Development Assistance (ODA) using Korean data. We separate total ODA into bilateral and multilateral and we measure the ODA effectiveness as economic growth and quality of life. We find that the positive effect of ODA depends on financial market development and this is stronger in multilateral aid than bilateral one. Based on these results, we suggest that Korean government should increase the share of multilateral funding and pay attention to recipients’ financial market development in making ODA decision.