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Who Gives Foreign Aid to Whom and Why?

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  • Dollar, David
  • Alesina, Alberto

Abstract

This paper studies the pattern of allocation of foreign aid from various donors to receiving countries. We find considerable evidence that the direction of foreign aid is dictated as much by political and strategic considerations, as by the economic needs and policy performance of the recipients. Colonial past and political alliances are major determinants of foreign aid. At the margin, however, countries that democratize receive more aid, ceteris paribus. While foreign aid flows respond to political variables, foreign direct investments are more sensitive to economic incentives, particularly "good policies" and protection of property rights in the receiving countries. We also uncover significant differences in the behavior of different donors.

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Bibliographic Info

Paper provided by Harvard University Department of Economics in its series Scholarly Articles with number 4553020.

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Date of creation: 2000
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Publication status: Published in Journal of Economic Growth
Handle: RePEc:hrv:faseco:4553020

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  1. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 1-118.
  2. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, American Economic Association, vol. 90(4), pages 847-868, September.
  3. Maizels, Alfred & Nissanke, Machiko K., 1984. "Motivations for aid to developing countries," World Development, Elsevier, Elsevier, vol. 12(9), pages 879-900, September.
  4. Trumbull, William N & Wall, Howard J, 1994. "Estimating Aid-Allocation Criteria with Panel Data," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 104(425), pages 876-82, July.
  5. Frey, Bruno S. & Schneider, Friedrich, 1986. "Competing models of international lending activity," Journal of Development Economics, Elsevier, Elsevier, vol. 20(2), pages 225-245, March.
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  1. Qui reçoit de l'aide humanitaire? Intérêts politiques et influence des médias
    by Emmanuel in Ecopublix on 2008-06-09 09:27:00
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