ABSTRACT
The Development Advisory Committee of the Organization for Economic Co-operation and Development (OECD) and others have urged developed countries to make one percent of gross national product available as aid. The OECD one percent guideline may be thought of as an official development assistance "supply" statistic. In what follows, attention is given to "demand" or use measures that might be employed in judging whether the geographic allocation of aid monies is appropriate. In all OECD nations, the central governments distribute funds to local areas, either directly or through lower-level governmental units. There has been extensive theoretical writing on what formulas should be used, but in most instances, aid monies are allocated by formulas that include population and per capita income. The potential for significant private capital inflows exists in both countries. Indeed, there are few developing countries that look so promising for private investors as China and India.
