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Evidence of ‘foreign aid Keynesianism’

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  • Alessandro De Matteis

Abstract

Recent literature on the determinants of the US foreign aid budget has raised the hypothesis of a relationship between the latter and the extent of domestic poverty. This is particularly relevant at times of economic crisis and has led to talk of ‘foreign aid Keynesianism’. The present study is based on the experience of members of the Development Assistance Committee of the Organisation for Economic Co-operation and Development (OECD-DAC). It supports previous findings related to the United States and shows that the influence of domestic poverty on donor decision-making regarding the foreign aid budget is shared by other countries, strengthening support for the poverty--aid relationship. However, this positive result refers to only half of the sample considered and an opposite relationship can be detected in a few other cases.

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  • Alessandro De Matteis, 2013. "Evidence of ‘foreign aid Keynesianism’," Applied Economics Letters, Taylor & Francis Journals, vol. 20(11), pages 1040-1045, July.
    • Handle: RePEc:taf:apeclt:v:20:y:2013:i:11:p:1040-1045
    DOI: 10.1080/13504851.2013.774455
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    References listed on IDEAS

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    1. Stéphane Pallage & Michel A. Robe, 2001. "Foreign Aid and the Business Cycle," Review of International Economics, Wiley Blackwell, vol. 9(4), pages 641-672, November.
    2. Sam Jones, 2011. "Aid Supplies Over Time: Accounting for Heterogeneity, Trends and Dynamics," WIDER Working Paper Series wp-2011-004, World Institute for Development Economic Research (UNU-WIDER).
    3. Round, Jeffery I. & Odedokun, Matthew, 2004. "Aid effort and its determinants," International Review of Economics & Finance, Elsevier, vol. 13(3), pages 293-309.
    4. Sam Jones, 2011. "Aid Supplies Over Time Accounting for Heterogeneity, Trends, and Dynamics," WIDER Working Paper Series 004, World Institute for Development Economic Research (UNU-WIDER).
    5. Gillis, Malcolm, 1982. "Allocative and X-efficiency in state-owned mining enterprises: Comparisons between Bolivia and Indonesia," Journal of Comparative Economics, Elsevier, vol. 6(1), pages 1-23, March.
    6. Markus Goldstein & Todd Moss, 2005. "Compassionate conservatives or conservative compassionates? US political parties and bilateral foreign assistance to Africa," Journal of Development Studies, Taylor & Francis Journals, vol. 41(7), pages 1288-1302.
    7. Pallage, Stephane & Robe, Michel A, 2001. "Foreign Aid and the Business Cycle," Review of International Economics, Wiley Blackwell, vol. 9(4), pages 641-672, November.
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    Cited by:

    1. Alessandro De Matteis, 2016. "Whose poverty really matters when deciding aid volumes?," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 12(1/2), pages 28-53.

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