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Explaining development aid allocation by growth

Author

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  • Hristos Doucouliagos
  • Martin Paldam

Abstract

Purpose - The purpose of this paper is to study a little researched relation: the relation from economic growth in a less developed country to the development aid it receives. Does economic growth influence donor aid allocation decisions? Design/methodology/approach - The authors’ apply two different methodologies. First, a quantitative and systematic review is presented of the literature of 30 empirical studies of aid allocation where a growth coefficient is estimated. Second, a primary study is presented of the data using a panel of 147 countries for the period 1967‐2004. Findings - The growth‐aid relation should be negative if humanitarian motives dominate aid allocation decisions. The result from both the meta‐analysis and the primary data analysis suggests a very small effect between lagged growth and aid allocations, with a dominating positive sign. This result appears to be driven partly by the large development banks. Originality/value - No attempt has previously been made to summarize the literature on growth as a motive for giving aid. This paper offers the first attempt to do so, by presenting a meta‐analysis of the empirical literature, as well as analysis of the primary data.

Suggested Citation

  • Hristos Doucouliagos & Martin Paldam, 2013. "Explaining development aid allocation by growth," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 2(1), pages 21-41, April.
  • Handle: RePEc:eme:jepppp:v:2:y:2013:i:1:p:21-41
    DOI: 10.1108/20452101311318657
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    Citations

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    Cited by:

    1. Ryan Yeung & Phuong Nguyen-Hoang, 2016. "Endogenous peer effects: Fact or fiction?," The Journal of Educational Research, Taylor & Francis Journals, vol. 109(1), pages 37-49, January.
    2. John P. A. Ioannidis & T. D. Stanley & Hristos Doucouliagos, 2017. "The Power of Bias in Economics Research," Economic Journal, Royal Economic Society, vol. 127(605), pages 236-265, October.
    3. repec:wly:econjl:v::y:2017:i:605:p:f236-f265 is not listed on IDEAS

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