Should a donor country spend aid money through bilateral or multilateral channels? What are the comparative merits of each aid channel and how should a bilateral donor begin to choose between them? This working paper informs the calculus of bilateral donors struggling to optimise their resource allocation across these two implementation channels and emphasises the value of thinking strategically about the choice to be made. Based on an extensive literature review, it presents what is potentially gained through the use of multilateral and bilateral channels, as well as what might be risked. Finally, it discusses the role of multi-bi aid and whether this provides an opportunity to exploit the advantages of both channels. The paper thus aims to nudge donors to make more informed choices in the utilisation of the principal channels for official development assistance.
