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Aid Effort and Its Determinants: A Comparison of the Italian Performance with other OECD Donors

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Author Info
Simone Bertoli () (Università degli Studi di Firenze, Dipartimento di Scienze Economiche)
Giovanni Andrea Cornia () (Università degli Studi di Firenze, Dipartimento di Scienze Economiche)
Francesco Manaresi (Università degli Studi di Bologna, Dipartimento di Scienze Economiche)

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Abstract

this paper aims at contributing to a better understanding of the determinants of aid effort by donor countries, a topic that has been rather under researched in the vast economic literature on development aid. We conduct an econometric analysis on panel data that refer to the 22 member countries of the OECD Development Assistance Committee over the 1970 2004 period; the estimates are then used as a benchmark against which we assess to what extent the poor Italian aid performance can be traced back to its specific macroeconomic, structural and institutional characteristics. The analysis suggests that these factors – that are found to significantly influence aid effort – fall short of explaining the limited amount of fiscal resources that Italy devotes to international aid. Even when its specific characteristics are accounted for, Italy is found to be lagging behind the OECD norm, so that the analysis challenges the claims that the limited Italian aid effort is due to binding fiscal constraints.

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Paper provided by Universita' degli Studi di Firenze, Dipartimento di Scienze Economiche in its series Working Papers Series with number wp2008_11.rdf.

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Length: 43 pag
Date of creation: 2008
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Handle: RePEc:frz:wpaper:wp2008_11.rdf

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Related research
Keywords: foreign aid; fiscal expenditures; economic development;

Find related papers by JEL classification:
F35 - International Economics - - International Finance - - - Foreign Aid
H59 - Public Economics - - National Government Expenditures and Related Policies - - - Other
H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
O1 - Economic Development, Technological Change, and Growth - - Economic Development

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    Other versions:
  2. Mosley, Paul, 1985. "The Political Economy of Foreign Aid: A Model of the Market for a Public Good," Economic Development and Cultural Change, University of Chicago Press, vol. 33(2), pages 373-93, January.
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    Other versions:
  4. Ugur Karakaplan & Bilin Neyapti & Selin Sayek, 2005. "Aid and Foreign Direct Investment: International Evidence," Working Papers 2005/12, Turkish Economic Association. [Downloadable!]
    Other versions:
  5. David Roodman, 2007. "The Anarchy of Numbers: Aid, Development, and Cross-Country Empirics," World Bank Economic Review, Oxford University Press, vol. 21(2), pages 255-277, May. [Downloadable!] (restricted)
    Other versions:
  6. Dudley, L., 1977. "Foreign Aid and the Theory of Alliances," Cahiers de recherche 7704, Universite de Montreal, Departement de sciences economiques.
    Other versions:
  7. Anne Boschini & Anders Olofsgård, 2007. "Foreign aid: An instrument for fighting communism?," The Journal of Development Studies, Taylor and Francis Journals, vol. 43(4), pages 622-648. [Downloadable!] (restricted)
  8. Schiff, Maurice, 1994. "How trade, aid, and remittances affect international migration," Policy Research Working Paper Series 1376, The World Bank. [Downloadable!]
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  13. Elbadawi, Ibrahim A, 1999. "External Aid: Help or Hindrance to Export Orientation in Africa?," Journal of African Economies, Oxford University Press, vol. 8(4), pages 578-616, December.
  14. KIMURA Hidemi & TODO Yasuyuki, 2007. "Is Foreign Aid a Vanguard of FDI? A Gravity-Equation Approach," Discussion papers 07007, Research Institute of Economy, Trade and Industry (RIETI). [Downloadable!]
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    Other versions:
  16. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July. [Downloadable!] (restricted)
    Other versions:
  17. Thierry Tressel & Alessandro Prati, 2006. "Aid Volatility and Dutch Disease: Is There a Role for Macroeconomic Policies?," IMF Working Papers 06/145, International Monetary Fund. [Downloadable!]
  18. Cohen, Daniel, 1996. "The sustainability of African debt," Policy Research Working Paper Series 1621, The World Bank. [Downloadable!]
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