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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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  • Brück, Tilman & Xu, Guo, 2012. "Who gives aid to whom and when? Aid accelerations, shocks and policies," European Journal of Political Economy, Elsevier, vol. 28(4), pages 593-606.
  • Handle: RePEc:eee:poleco:v:28:y:2012:i:4:p:593-606
    DOI: 10.1016/j.ejpoleco.2012.05.011
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    Cited by:

    1. Çağatay Bircan & Tilman Brück & Marc Vothknecht, 2017. "Violent conflict and inequality," Oxford Development Studies, Taylor & Francis Journals, vol. 45(2), pages 125-144, April.
    2. Yasemin Bal Gündüz & Masyita Crystallin, 2018. "Do IMF programs catalyze donor assistance to low-income countries?," The Review of International Organizations, Springer, vol. 13(3), pages 359-393, September.
    3. Tilman Brück & Olaf J. de Groot & Guo Xu, 2011. "Does Security Play a Role in European Development Aid Policy?," EUSECON Policy Briefing 11, DIW Berlin, German Institute for Economic Research.
    4. Udvari, Beáta & Dávid Kiss, Gábor & Pontet, Julianna, 2016. "Challenges of Missing Data in Analyses of Aid Activity: The Case of US Aid Activity," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 39(1-2), pages 1-25, March-Jun.
    5. Stubbs, Thomas H. & Kentikelenis, Alexander E. & King, Lawrence P., 2016. "Catalyzing Aid? The IMF and Donor Behavior in Aid Allocation," World Development, Elsevier, vol. 78(C), pages 511-528.
    6. Peter Nunnenkamp & Hannes Öhler & Rainer Thiele, 2013. "Donor coordination and specialization: did the Paris Declaration make a difference?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(3), pages 537-563, September.
    7. Andreas Fuchs & Peter Nunnenkamp & Hannes Öhler, 2015. "Why Donors of Foreign Aid Do Not Coordinate: The Role of Competition for Export Markets and Political Support," The World Economy, Wiley Blackwell, vol. 38(2), pages 255-285, February.
    8. Nagae, Akira & Katayama, Hajime & Takase, Koichi, 2022. "Donor aid allocation and accounting standards of recipients," Economic Modelling, Elsevier, vol. 106(C).
    9. repec:elg:eechap:15325_15 is not listed on IDEAS
    10. Tobias Heinrich & Matt W. Loftis, 2019. "Democracy Aid and Electoral Accountability," Journal of Conflict Resolution, Peace Science Society (International), vol. 63(1), pages 139-166, January.
    11. Berrittella, Maria, 2017. "Can stability of foreign aid agreement reduce global income inequality?," Economic Analysis and Policy, Elsevier, vol. 54(C), pages 105-111.
    12. Tilman Brück & Olaf J de Groot & Friedrich Schneider, 2011. "The economic costs of the German participation in the Afghanistan war," Journal of Peace Research, Peace Research Institute Oslo, vol. 48(6), pages 793-805, November.
    13. Granath, Louise, 2016. "The rise of China: Competing or complementary to DAC aid flows in Africa?," Working Papers in Economics 671, University of Gothenburg, Department of Economics.
    14. Hicks, Daniel L. & Hicks, Joan Hamory & Maldonado, Beatriz, 2016. "Women as policy makers and donors: Female legislators and foreign aid," European Journal of Political Economy, Elsevier, vol. 41(C), pages 46-60.
    15. 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.
    16. Young, Andrew T. & Sheehan, Kathleen M., 2014. "Foreign aid, institutional quality, and growth," European Journal of Political Economy, Elsevier, vol. 36(C), pages 195-208.
    17. Hagen, Rune Jansen, 2014. "Rents and the Political Economy of Development Aid," Working Papers in Economics 07/14, University of Bergen, Department of Economics.

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    More about this item

    Keywords

    ODA; Growth acceleration; Policies;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General

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