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How Do Political Changes Influence US Bilateral Aid Allocations? Evidence from Panel Data

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Author Info
Robert K. Fleck
Christopher Kilby

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Abstract

This paper examines the role of US domestic politics in aid allocation using panel data on 119 countries from 1960 to 1997. Employing proxies for four allocation criteria (development concerns, strategic importance, commercial importance, and democratization), we find evidence that each has influence, although the evidence is stronger for some criteria (development, commercial) than for others (strategic, democratization). Their influence depends on the composition of the US government. When the president and Congress are liberal, development concerns receive more weight than when the president and/or Congress are more conservative. When the Congress is more conservative, commercial concerns have more weight than when the Congress is liberal. These findings are important in light of current attempts to overhaul the allocation of aid. Copyright © 2006 The Authors; Journal compilation © 2006 Blackwell Publishing Ltd.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9361.2006.00313.x
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Publisher Info
Article provided by Blackwell Publishing in its journal Review of Development Economics.

Volume (Year): 10 (2006)
Issue (Month): 2 (05)
Pages: 210-223
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Handle: RePEc:bla:rdevec:v:10:y:2006:i:2:p:210-223

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  1. Ball, Richard & Johnson, Christopher, 1996. "Political, Economic, and Humanitarian Motivations for PL 480 Food Aid: Evidence from Africa," Economic Development and Cultural Change, University of Chicago Press, vol. 44(3), pages 515-37, April.
  2. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Blackwell Publishing, vol. 58(2), pages 277-97, April. [Downloadable!] (restricted)
  3. Gang, Ira N. & Lehman, James A., 1990. "New directions or not: USAID in Latin America," World Development, Elsevier, vol. 18(5), pages 723-732, May. [Downloadable!] (restricted)
  4. Thomas Barnebeck Andersen & Henrik Hansen & Thomas Markussen, 2004. "US Politics and World Bank IDA-Lending," Discussion Papers 05-06, University of Copenhagen. Department of Economics, revised May 2005. [Downloadable!]
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  5. William Easterly & Ross Levine & David Roodman, 2004. "Aid, Policies, and Growth: Comment," American Economic Review, American Economic Association, vol. 94(3), pages 774-780, June. [Downloadable!]
  6. Craig Burnside & David Dollar, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September. [Downloadable!] (restricted)
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  7. Frey, Bruno S. & Schneider, Friedrich, 1986. "Competing models of international lending activity," Journal of Development Economics, Elsevier, vol. 20(2), pages 225-245, March. [Downloadable!] (restricted)
  8. Dudley, Leonard & Montmarquette, Claude, 1976. "A Model of the Supply of Bilateral Foreign Aid," American Economic Review, American Economic Association, vol. 66(1), pages 132-42, March. [Downloadable!] (restricted)
  9. Fleck, Robert K. & Kilby, Christopher & Fleck, Robert K., 1998. "Foreign Aid and Domestic Politics: Voting in Congress and the Allocation of USAID Contracts Across Congressional Districts," Vassar College Department of Economics Working Paper Series 44, Vassar College Department of Economics, revised Dec 1999.
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  10. Fleck, Robert K. & Kilby, Christopher & Fleck, Robert K., 2001. "World Bank Independence: A Model and Statistical Analysis of U.S. Influence," Vassar College Department of Economics Working Paper Series 53, Vassar College Department of Economics. [Downloadable!]
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  11. Boone, Peter, 1996. "Politics and the effectiveness of foreign aid," European Economic Review, Elsevier, vol. 40(2), pages 289-329, February. [Downloadable!] (restricted)
  12. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, vol. 64(2), pages 547-570, April. [Downloadable!] (restricted)
  13. Axel Dreher & Nathan Jensen, 2003. "Independent Actor or Agent? An Empirical Analysis of the impact of US interests on IMF Conditions," International Finance 0310004, EconWPA, revised 08 Jan 2004. [Downloadable!]
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  14. Alesina, Alberto & Dollar, David, 2000. " Who Gives Foreign Aid to Whom and Why?," Journal of Economic Growth, Springer, vol. 5(1), pages 33-63, March. [Downloadable!] (restricted)
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  15. Alberto Alesina & Beatrice Weder, 2002. "Do Corrupt Governments Receive Less Foreign Aid?," American Economic Review, American Economic Association, vol. 92(4), pages 1126-1137, September. [Downloadable!]
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Axel Dreher & Jan-Egbert Sturm & James Raymond Vreeland, 2006. "Does Membership on the UN Security Council Influence IMF Decisions? Evidence from Panel Data," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  2. Peter Nunnenkamp & Janina Weingarth & Johannes Weisser, 2008. "Is NGO Aid Not So Different After All? Comparing the Allocation of Swiss Aid by Private and Official Donors," Kiel Working Papers 1405, Kiel Institute for the World Economy. [Downloadable!]
  3. Dirk-Jan Koch & Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2008. "Keeping a Low Profile: What Determines the Allocation of Aid by Non-Governmental Organizations?," Kiel Working Papers 1406, Kiel Institute for the World Economy. [Downloadable!]
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  4. Azam, Jean-Paul & Thelen, Véronique, 2007. "The Roles of Foreign Aid and Education in the War on Terror," IDEI Working Papers 449, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
  5. Peter Nunnenkamp & Hannes Öhler, 2009. "Aid Allocation through Various Official and Private Channels: Need, Merit and Self-Interest as Motives of German Donors," Kiel Working Papers 1536, Kiel Institute for the World Economy. [Downloadable!]
  6. Fleck, Robert K. & Kilby, Christopher & Fleck, Robert K., 2001. "World Bank Independence: A Model and Statistical Analysis of U.S. Influence," Vassar College Department of Economics Working Paper Series 53, Vassar College Department of Economics. [Downloadable!]
    Other versions:
  7. Erik Lundsgaarde & Christian Breunig & Aseem Prakash, 2007. "Trade versus aid: donor generosity in an era of globalization," Policy Sciences, Springer, vol. 40(2), pages 157-179, June. [Downloadable!] (restricted)
  8. Azam, Jean-Paul & Berlinschi, Ruxanda, 2008. "The Aid-Migration of Trade-Off," IDEI Working Papers 538, Institut d'Économie Industrielle (IDEI), Toulouse. [Downloadable!]
  9. Felicitas Nowak-Lehmann D. & Inmaculada Martínez-Zarzoso & Dierk Herzer & Stephan Klasen & Axel Dreher, 2009. "In Search for a Long-run Relationship between Aid and Growth: Pitfalls and Findings," Ibero America Institute for Econ. Research (IAI) Discussion Papers 196, Ibero-America Institute for Economic Research. [Downloadable!]
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