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Who gives aid to whom and when? Aid accelerations, shocks and policies

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  • Brück, Tilman
  • Xu, Guo

Abstract

We address the pitfalls of averaging by exploiting the longitudinal variation in aid to identify sudden and sharp increases in aid flows. Focusing on specific events, we test if aid accelerations correspond to policies and shocks in the recipient country. We find that positive regime changes and wars are significant predictors of aid accelerations. The results also suggest the presence of aid spill-overs, where neighbors of war-torn countries are almost as likely to experience large aid inflows. Disaggregating aid flows by donors, we find some indicative evidence for competing allocation rules among European donors. We argue that drivers of aid accelerations differ from drivers of average aid flows—a distinction that can help reconcile some of the ambiguous empirical results in the aid literature.

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Bibliographic Info

Article provided by Elsevier in its journal European Journal of Political Economy.

Volume (Year): 28 (2012)
Issue (Month): 4 ()
Pages: 593-606

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Handle: RePEc:eee:poleco:v:28:y:2012:i:4:p:593-606

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Web page: http://www.elsevier.com/locate/inca/505544

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Keywords: ODA; Growth acceleration; Policies;

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Cited by:
  1. Andreas Fuchs & Peter Nunnenkamp & Hannes Öhler, 2013. "Why Donors of Foreign Aid Do Not Coordinate: The Role of Competition for Export Markets and Political Support," Kiel Working Papers 1825, Kiel Institute for the World Economy.
  2. Michael Brzoska & Raphael Bossong & Eric van Um, 2011. "Security Economics in the European Context: Implications of the EUSECON Project," Economics of Security Working Paper Series 58, DIW Berlin, German Institute for Economic Research.

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