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Are ‘New’ Donors Different? Comparing the Allocation of Bilateral Aid Between nonDAC and DAC Donor Countries

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  • Dreher, Axel
  • Nunnenkamp, Peter
  • Thiele, Rainer

Abstract

Major DAC donors are widely criticized for weak targeting of aid, selfish aid motives, and insufficient coordination. The emergence of an increasing number of new donors may further complicate the coordination of international aid efforts. At the same time, it is open to question whether new donors (many of which were aid recipients until recently) are more altruistic and provide better targeted aid according to need and merit. Project-level data on aid by new donors, as collected by the AidData initiative, allow for empirical analyses comparing the allocation behavior of new versus old donors. We employ Probit and Tobit models and test for significant differences in the distribution of aid by new and old donors across recipient countries. We find that, on average, new donors care less for recipient need than old donors. New and old donors behave similarly in several respects, however. They disregard merit by not taking the level of corruption in recipient countries into account. Concerns that commercial self-interest distorts the allocation of aid seem to be overblown for both groups.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 39 (2011)
Issue (Month): 11 ()
Pages: 1950-1968

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Handle: RePEc:eee:wdevel:v:39:y:2011:i:11:p:1950-1968

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Web page: http://www.elsevier.com/locate/worlddev

Related research

Keywords: aid allocation; new donors; donor motives; Probit; Tobit;

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References

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  1. Nunnenkamp, Peter & Thiele, Rainer, 2006. "Targeting aid to the needy and deserving : nothing but promises?," Open Access Publications from Kiel Institute for the World Economy 3875, Kiel Institute for the World Economy (IfW).
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Citations

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Cited by:
  1. Fuchs, Andreas & Vadlamannati, Krishna Chaitanya, 2012. "The Needy Donor: An Empirical Analysis of India’s Aid Motives," Working Papers 0532, University of Heidelberg, Department of Economics.
  2. Axel Dreher & Andreas Fuchs, 2011. "Rogue Aid? The Determinants of China’s Aid Allocation," Working Papers CEB 11-035, ULB -- Universite Libre de Bruxelles.
  3. Audrey Menard, 2012. "Do natural resources condition the aidgovernance relationship? Evidence from Africa," Working Papers of BETA 2012-18, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.

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