The Accra Agenda for Action contains acommitment to increase aid effectiveness by 'addressingthe issue of countries with insufficient aid.' Thispaper highlights the difficulties in identifying suchcountries unequivocally, given the limited theoretical andempirical knowledge on optimal aid allocations. Actual aidreceipts by low income countries are compared to severalbenchmarks derived from different aid allocation models.These models differ primarily with regard to the weightsassigned to country needs and performance. The analysisshows that different aid allocation models identifydifferent sets of countries as receiving insufficient aid.The paper does not find a greater tendency for fragilestates to receive insufficient aid compared to non-fragilestates. However, there appears a greater tendency forbilateral aid to leave countries with insufficient aidcompared to multi-lateral aid, which in fact in many casespartly compensates for under-funding from bilateral donors.The potential aggregate cost of increasing aid to countrieswith insufficient aid varies significantly depending onwhich aid allocation model is used, but could be as high asUS$ 7 billion annually. Enhanced coordination ofdonors' aid allocation decisions to ensure that no lowincome country ends up inadvertently as an aid orphan willbe an important step in addressing 'the issue ofcountries with insufficient aid.'
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