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On the Channel and Type of International Disaster Aid

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  • Paul A. Raschky

    ()

  • Manijeh Schwindt

    ()

Abstract

Research suggests that a donor country?s decision to provide post-disaster assistance is not only driven by the severity of a disaster and the resulting humanitarian needs in the recipient country but also by strategic considerations. We argue that the identification of the determinants of the size of disaster assistance is a first step in the analysis of the donor?s behavior. Since all aid is not motivated by the same reasons, the evaluation of the donor country?s behavior requires a second step accounting for the type and the channel of aid provided. Using data on international disaster assistance between 2000 and 2007 one can examine both the donor countries' decision on the channel (bilateral vs. multilateral) and the type of disaster relief (cash vs. in-kind). The empirical results suggest that international disaster relief is not as much driven by the needs of the recipient country but also by strategic interests (e.g. oil, trade relationships) of the donor country. Bilateral and cash transfers are used as a vehicle to signal strategic interests, while multilateral and in-kind transfers are chosen to control for misuse in badly governed recipient countries.

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Bibliographic Info

Paper provided by Faculty of Economics and Statistics, University of Innsbruck in its series Working Papers with number 2009-16.

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Length: 34
Date of creation: May 2009
Date of revision:
Handle: RePEc:inn:wpaper:2009-16

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Keywords: Foreign aid; natural disasters; bilateral vs. multilateral; type of aid;

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References

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  1. Alberto Alesina & David Dollar, 1998. "Who Gives Foreign Aid to Whom and Why?," NBER Working Papers 6612, National Bureau of Economic Research, Inc.
  2. Firouz Gahvari & Enlinson Mattos, 2007. "Conditional Cash Transfers, Public Provision of Private Goods, and Income Redistribution," American Economic Review, American Economic Association, vol. 97(1), pages 491-502, March.
  3. Besley, T. & Coate, S., 1989. "Public Provision Of Private Goods And The Redistribution Of Income," Papers 36, Princeton, Woodrow Wilson School - Discussion Paper.
  4. Dudley, Leonard & Montmarquette, Claude, 1976. "A Model of the Supply of Bilateral Foreign Aid," American Economic Review, American Economic Association, vol. 66(1), pages 132-42, March.
  5. Svensson, J., 1995. "When Is Foreign Aid Policy Credible? Aid Dependence and Conditionality," Papers 600, Stockholm - International Economic Studies.
  6. Ouattara, Bazoumana & Amegashie, J. Atsu & Strobl, Eric, 2009. "Moral Hazard and the Composition of Transfers: Theory with an Application to Foreign Aid," Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 24, Verein für Socialpolitik, Research Committee Development Economics.
  7. Berthelemy, Jean-Claude & Tichit, Ariane, 2004. "Bilateral donors' aid allocation decisions--a three-dimensional panel analysis," International Review of Economics & Finance, Elsevier, vol. 13(3), pages 253-274.
  8. Garcia, Serge & Harou, Patrice & Montagné, Claire & Stenger, Anne, 2009. "Models for sample selection bias in contingent valuation: Application to forest biodiversity," Journal of Forest Economics, Elsevier, vol. 15(1-2), pages 59-78, January.
  9. Janet Currie & Firouz Gahvari, 2007. "Transfers in Cash and In Kind: Theory Meets the Data," NBER Working Papers 13557, National Bureau of Economic Research, Inc.
  10. Peter Huber & Klaus Nowotny, 2008. "Moving Across Borders: Who is Willing to Migrate or to Commute?," WIFO Working Papers 322, WIFO.
  11. Ilyana Kuziemko & Eric Werker, 2006. "How Much Is a Seat on the Security Council Worth? Foreign Aid and Bribery at the United Nations," Journal of Political Economy, University of Chicago Press, vol. 114(5), pages 905-930, October.
  12. Ariel Fiszbein & Norbert Schady & Francisco H. G. Ferreira & Margaret Grosh & Niall Keleher & Pedro Olinto & Emmanuel Skoufias, 2009. "Conditional Cash Transfers : Reducing Present and Future Poverty," World Bank Publications, The World Bank, number 2597, February.
  13. Fink, Guenther & Redaelli, Silvia, 2009. "Determinants of international emergency aid - humanitarian need only ?," Policy Research Working Paper Series 4839, The World Bank.
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Cited by:
  1. Nunnenkamp, Peter & Öhler, Hannes, 2011. "Aid Allocation through Various Official and Private Channels: Need, Merit, and Self-Interest as Motives of German Donors," World Development, Elsevier, vol. 39(3), pages 308-323, March.
  2. Oscar Becerra & Eduardo Cavallo & Ilan Noy, 2010. "In the Aftermath of Large Natural Disasters, what happens to foreign aid?," Working Papers 201018, University of Hawaii at Manoa, Department of Economics.
  3. Geethanjali Selvaretnam & Kannika Thampanishvong & David Ulph, . "Saving and Re-building Lives: an Analysis of the Determinants of Disaster Relief," CRIEFF Discussion Papers 1202, Centre for Research into Industry, Enterprise, Finance and the Firm.

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