Determinants of South Korea’s grants for adaptation aid

Despite global commitments to adaptation finance, climate-vulnerable countries continue to face substantial gaps between their adaptation needs and access to financial resources. While these persistent discrepancies have motivated extensive research on donors’ allocation of adaptation aid, existing studies have largely focused on multilateral institutions or aggregate donor behavior, donor-specific analyses remain underdeveloped, limiting insights into the heterogeneity of individual donor behavior. This study contributes to the literature by investigating the determinants of South Korea’s grant-based adaptation aid. Using a dyadic dataset on South Korea’s adaptation grants to 141 recipient countries from 2014 to 2022, the analysis applies a two-stage Cragg model. The first-stage selection model estimates the probability of adaptation grants allocation with logistic regression analysis, while the second-stage model, conditional on the selection results from the first stage, employs pooled OLS (Ordinary Least Squares) with robust standard errors to assess factors determining adaptation aid volumes. Building on the previous literature, the study tests the influence of recipient needs, recipient merits and donor interests. The results show that recipient needs (physical vulnerability and adaptive capacity) and recipient merits do not significantly influence South Korea’s decisions on adaptation aid allocation, yet donor’s economic interests captured by total trade emerge as the robust predictor across model specifications. These findings indicate the synergy between adaptation grants and donor’s economic interests, which suggests opportunities to design adaptation programs to balance objectives to mitigate damage from climate risks and strengthen economic linkages for South Korean industries. Nevertheless, the results underscore the need for South Korea to align with international normative principles prioritizing vulnerable countries by embedding vulnerability assessment frameworks into program appraisal.