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Who’s Afraid of Foreign Aid? The Donors’ Perspective

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  • Alberto Chong
  • Mark Gradstein

Abstract

With efforts across the industrial countries to increase the amount of foreign aid mounting, it is important to understand its determinants. This paper examines the factors affecting the support for foreign aid among voters in donor countries. A simple theoretical model, which considers an endogenous determination of official and private aid flows, relates individual income to aid support through the elasticity of substitution and also suggests that government efficiency is an important factor in this regard. The empirical analysis of individual attitudes, based on the World Values Surveys, reveals that satisfaction with own government performance and individual relative income are positively related to the willingness to provide foreign aid. Furthermore, when using donor country data we find that aid is adversely affected by government inefficiency and income inequality.

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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1833.

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Date of creation: 2006
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Handle: RePEc:ces:ceswps:_1833

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Keywords: foreign aid; donors; perceptions; development; corruption;

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Cited by:
  1. Armando Barrientos & Daniel Neff, 2011. "Attitudes to Chronic Poverty in the ‘Global Village’," Social Indicators Research, Springer, Springer, vol. 100(1), pages 101-114, January.
  2. Simone Bertoli & Giovanni Andrea Cornia & Francesco Manaresi, 2007. "Aid performance and its determinants. A comparison of Italy with the OECD norm," BNL Quarterly Review, Banca Nazionale del Lavoro, Banca Nazionale del Lavoro, vol. 60(242), pages 271-321.
  3. Matteo Bobba & Andrew Powell, 2007. "Aid and Growth: Politics Matters," Research Department Publications, Inter-American Development Bank, Research Department 4511, Inter-American Development Bank, Research Department.
  4. Matteo Bobba & Andrew Powell, 2007. "Ayuda y crecimiento: La política importa," Research Department Publications, Inter-American Development Bank, Research Department 4512, Inter-American Development Bank, Research Department.
  5. Matteo Bobba & Andrew Powell, 2006. "Multilateral Intermediation of Foreign Aid: What is the Trade-Off for Donor Countries?," IDB Publications 6728, Inter-American Development Bank.
  6. Simone Bertoli & Giovanni Andrea Cornia & Francesco Manaresi, 2008. "Aid Effort and Its Determinants: A Comparison of the Italian Performance with other OECD Donors," Working Papers - Economics wp2008_11.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
  7. Matteo Bobba & Andrew Powell, 2006. "Mediación multilateral de la ayuda extranjera," Research Department Publications, Inter-American Development Bank, Research Department 4501, Inter-American Development Bank, Research Department.
  8. Paxton, Pamela & Knack, Stephen, 2008. "Individual and country-level factors affecting support for foreign aid," Policy Research Working Paper Series 4714, The World Bank.

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