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The determinants of aid in the post-cold war era

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  • Subhayu Bandyopadhyay
  • Howard J. Wall

Abstract

This paper estimates the responsiveness of aid to recipient countries’ economic and physical needs, civil/political rights, and government effectiveness. We look exclusively at the post-Cold War era and use fixed effects to control for the political, strategic, and other considerations of donors. We find that aid and per capita income have been negatively related, while aid has been positively related to infant mortality, rights, and government effectiveness.

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Bibliographic Info

Paper provided by Federal Reserve Bank of St. Louis in its series Working Papers with number 2006-021.

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Date of creation: 2006
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Handle: RePEc:fip:fedlwp:2006-021

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  1. Raghuram G. Rajan & Arvind Subramanian, 2008. "Aid and Growth: What Does the Cross-Country Evidence Really Show?," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 643-665, November.
  2. Kosack, Stephen, 2003. "Effective Aid: How Democracy Allows Development Aid to Improve the Quality of Life," World Development, Elsevier, vol. 31(1), pages 1-22, January.
  3. Alberto Alesina & Beatrice Weder, 2002. "Do Corrupt Governments Receive Less Foreign Aid?," American Economic Review, American Economic Association, vol. 92(4), pages 1126-1137, September.
  4. William Easterly & Ross Levine & David Roodman, 2004. "Aid, Policies, and Growth: Comment," American Economic Review, American Economic Association, vol. 94(3), pages 774-780, June.
  5. Burnside, Craig & Dollar, David, 2004. "Aid, policies, and growth : revisiting the evidence," Policy Research Working Paper Series 3251, The World Bank.
  6. Maizels, Alfred & Nissanke, Machiko K., 1984. "Motivations for aid to developing countries," World Development, Elsevier, vol. 12(9), pages 879-900, September.
  7. Dollar, David & Alesina, Alberto, 2000. "Who Gives Foreign Aid to Whom and Why?," Scholarly Articles 4553020, Harvard University Department of Economics.
  8. Burnside, Craig & Dollar, David, 1997. "Aid, policies, and growth," Policy Research Working Paper Series 1777, The World Bank.
  9. Dowling, J. M. & Hiemenz, Ulrich, 1985. "Biases in the allocation of foreign aid: Some new evidence," World Development, Elsevier, vol. 13(4), pages 535-541, April.
  10. Wall, Howard J., 1995. "The allocation of official development assistance," Journal of Policy Modeling, Elsevier, vol. 17(3), pages 307-314, June.
  11. Eric Neumayer, 2003. "Do Human Rights Matter in Bilateral Aid Allocation? A Quantitative Analysis of 21 Donor Countries," Social Science Quarterly, Southwestern Social Science Association, vol. 84(3), pages 650-666.
  12. Raghuram Rajan & Arvind Subramanian, 2005. "Aid and Growth," IMF Working Papers 05/127, International Monetary Fund.
  13. Trumbull, William N & Wall, Howard J, 1994. "Estimating Aid-Allocation Criteria with Panel Data," Economic Journal, Royal Economic Society, vol. 104(425), pages 876-82, July.
  14. Boone, Peter, 1996. "Politics and the effectiveness of foreign aid," European Economic Review, Elsevier, vol. 40(2), pages 289-329, February.
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Citations

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Cited by:
  1. Jonathan Munemo, 2011. "Foreign aid and export diversification in developing countries," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 20(3), pages 339-355.
  2. Javed Younas & Subhayu Bandyopadhyay, 2009. "Do donors care about declining trade revenue from liberalization? an analysis of bilateral aid allocation," Review, Federal Reserve Bank of St. Louis, issue May, pages 141-154.
  3. Fumitaka Furuoka, 2008. "A Dynamic Model of Foreign Aid Allocation," Economics Bulletin, AccessEcon, vol. 15(8), pages 1-13.
  4. Szent-Ivanyi, Balazs, 2010. "Aid Allocation of the Emerging Central and Eastern European Donors," MPRA Paper 30234, University Library of Munich, Germany.
  5. Wolff, Hendrik & Chong, Howard & Auffhammer, Maximilian, 2009. "Human Development Index: Are Developing Countries Misclassified? (former title: "Consequences of Data Error in Aggregate Indicators: Evidence from the Human Development Index)," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49763, Agricultural and Applied Economics Association.
  6. Badassa Tadasse & Bichaka Fayissa, 2009. "Determinants of the Allocation of US Aid forTrade," Working Papers 200901, Middle Tennessee State University, Department of Economics and Finance.
  7. Harrigan, Jane & Wang, Chengang, 2011. "A New Approach to the Allocation of Aid Among Developing Countries: Is the USA Different from the Rest?," World Development, Elsevier, vol. 39(8), pages 1281-1293, August.
  8. Wolff, Hendrik & Chong, Howard & Auffhammer, Maximilian, 2008. "Consequences of Data Error in Aggregate Indicators: Evidence from the Human Development Index," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt18s0z7mj, Department of Agricultural & Resource Economics, UC Berkeley.
  9. Era Dabla-Norris & Camelia Minoiu & Luis-Felipe Zanna, 2010. "Business Cycle Fluctuations, Large Shocks, and Development Aid," IMF Working Papers 10/240, International Monetary Fund.
  10. Hlavac, Marek, 2007. "Determinants of Multilateral Official Development Assistance: Evidence from a Panel Study of Countries in Sub-Saharan Africa," MPRA Paper 24243, University Library of Munich, Germany.
  11. repec:ebl:ecbull:v:15:y:2008:i:8:p:1-13 is not listed on IDEAS
  12. Robert K. Fleck & Christopher Kilby, 2009. "Changing Aid Regimes? U.S. Foreign Aid from the Cold War to the War on Terror," Villanova School of Business Department of Economics and Statistics Working Paper Series 1, Villanova School of Business Department of Economics and Statistics.

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