Does development assistance reduce climate vulnerability in developing countries? an empirical investigation.

Increasing climate vulnerability in developing countries impedes inclusive and sustainable development. The paper examines the linkages between official development assistance (ODA) and climate vulnerability while analysing the mediating role of adaptation readiness in 119 developing countries using a panel correlated standard error estimator. The study also investigates the relationship between ODA's sectoral composition and climate vulnerability. The findings reveal that ODA is positively associated with climate vulnerability across all models and regions. However, ODA disbursement according to governance readiness criteria is associated with low vulnerability. The sectoral analysis reveals that the share of social infrastructure, humanitarian, and debt assistance is more in highly vulnerable countries. In contrast, these countries receive less aid specific to production, economic infrastructure, and multi-sector, and donors commit most climate-related ODA in these sectors. Overall, findings suggest a lack of adaptation mainstreaming into ODA disbursements. Furthermore, it calls for exploiting unexplored opportunities for vulnerability reduction through ODA in those sectors where the share of ODA is high in vulnerable countries. [ABSTRACT FROM AUTHOR]