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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

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

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References

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Cited by:
  1. Axel Dreher & Andreas Fuchs, 2011. "Rogue Aid? The Determinants of China’s Aid Allocation," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 93, Courant Research Centre PEG, revised 29 Feb 2012.
  2. Fuchs, Andreas & Vadlamannati, Krishna Chaitanya, 2013. "The Needy Donor: An Empirical Analysis of India’s Aid Motives," World Development, Elsevier, vol. 44(C), pages 110-128.
  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.
  4. Austin Strange & Bradley Parks & Michael J. Tierney & Andreas Fuchs & Axel Dreher & Vijaya Ramachandran, 2013. "China’s Development Finance to Africa: A Media-Based Approach to Data Collection," Working Papers 323, Center for Global Development.
  5. Audrey Rose Menard, 2014. "Do natural resources condition the aid-governance relationship? Evidence from Africa," Economics Bulletin, AccessEcon, vol. 34(2), pages 1317-1326.

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