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A New Approach to the Allocation of Aid Among Developing Countries: Is the USA Different from the Rest?

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  • Harrigan, Jane
  • Wang, Chengang

Abstract

Summary This paper attempts to explain the factors that determine the geographical allocation of foreign aid. Its novelty is that it develops a rigorous theoretical model and conducts the corresponding empirical investigations based on a large panel dataset. We run regressions for different major donors (United States, Canada, France, Italy, Japan, United Kingdom, and multilateral organizations). with the explicit objective of establishing whether the United States, in light of its geopolitical hegemony, behaves differently from others. We find that all the donors respond to recipient need in their allocation of aid, but that the United States puts less emphasis on this than the other donors with the exception of Japan. We also find that the United States puts more emphasis on donor-recipient linkages than do the other donors suggesting that the United States attaches greater importance to issues of donor interest, for example, geopolitical, commercial, and other links with specific recipients.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 39 (2011)
Issue (Month): 8 (August)
Pages: 1281-1293

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Handle: RePEc:eee:wdevel:v:39:y:2011:i:8:p:1281-1293

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

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Keywords: aid allocation panel data USA donor;

References

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Citations

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Cited by:
  1. Kumar, Ronald/R, 2011. "Role of Trade, Aid, Remittances and Financial Development in Pakistan," MPRA Paper 38871, University Library of Munich, Germany.
  2. Chimhowu, Admos, 2013. "Aid for agriculture and rural development: A changing landscape with new players and challenges," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  3. Harrigan, Jane, 2011. "The Political Economy of Aid Flows to North Africa," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  4. Hermano, Víctor & Martín-Cruz, Natalia, 2013. "How to Deliver Foreign Aid? The Case of Projects Governed by the Spanish International Agency," World Development, Elsevier, vol. 43(C), pages 298-314.

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