by the alignment of votes between recipient and donors in the United Nations General Assembly (UNGA) using data from Strezhnev and Voeten (2009). Annual measures of voting alignment range from 0 to 1 with higher values implying higher similarity and are calculated as in Kilby (2013) using all UN votes. We calculate the mean alignment of the largest three sovereign trust fund donors, the United Kingdom, the United States and the Netherlands, which we label as “the G3.”<sup>19</sup> We exclude the European Commission, the second largest donor, because its preference aggregation process is more complex (e.g., Reinsberg et al. 2014). Second, we add a dummy for a colonial relationship between a G3 donor and the recipient country. Third, commercial interests are measured by total G3 exports, using data from the IMF (2015). A thorough test of the importance of these donor‐interest variables in aid allocation decisions would require a different data set, with donor‐recipient‐year observations. In our analysis, we merely use these as control variables.

Table 2 displays the descriptive statistics for the dependent and control variables in our sample. The average recipient country receives 1.8 USD trust fund aid per capita, a relative minor inflow compared to average per capita aid of 6.7 USD from IDA<sup>20</sup> and 67 USD from other sources.<sup>21</sup> However, trust fund volumes have increased over the sample period and represent significant inflows for some recipient countries as indicated by the maximum value of more than 82 USD trust fund aid per capita. Average GNI per capita is 2,744 USD, which the Bank classified as a lower middle income country in the fiscal year 2012. The mean of the aggregate CPIA rating is just below the median value of 3.5, and the maximum value is almost 5. Recipient countries’ education, health and environmental policy ratings range between 1 and 6 with an average value similar to the aggregate CPIA score. With regard to the political and economic variables, the data show that average voting affinity with the largest donors is slightly higher than the median value of 0.5. Total exports per capita from the G3 trust fund donors (UK, USA, and the Netherlands) vary substantially around the mean value of 202 USD per capita. The table further shows that one third of recipient countries in our sample are former G3 colonies, fragile countries make up 17 percent, and IDA‐ eligible countries 65 percent, of observations.

# **5. Estimation Method and Results**

This section compares the selectivity of trust fund aid to IDA and bilateral aid. We use panel models with year‐ and country‐fixed effects without a selection stage, because almost all recipient countries receive positive trust fund disbursements at least once during our sample period. Our sample includes all countries that the OECD’s Development Assistance Committee (DAC) considered developing countries in a given year.

As is common in the aid allocation literature, our baseline regression model looks as follows:

> 19 In the fiscal years 2002‐2012, these donors contributed 4.08, 2.47, and 2.04 billion constant USD respectively. The European Commission contributed 2.47 while Canada as the fifth largest donor contributed 1.12 billion USD.

> 20 This figure is based on the sample of all developing countries. Among IDA eligible countries, the figure is 10.3 USD per capita.

> 21 These high per capita figures are driven by island states.

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