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Aid Allocation through Various Official and Private Channels: Need, Merit and Self-Interest as Motives of German Donors

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Author Info
Peter Nunnenkamp
Hannes Öhler
Abstract

Previous literature largely ignores the heterogeneity of aid channels used by each single donor country. We estimate Tobit models to assess the relative importance of recipient need, recipient merit and self-interest of donors for various channels of official and private German aid across a large sample of recipient countries in 2005-2007. Our findings strongly underscore the need for a disaggregated analysis of aid allocation. Aid channels differ significantly in the extent to which need and merit are taken into account. Yet, the German case does not reveal unambiguously superior aid channels. Better targeted aid through some channels seems to be conditioned on political support by recipient countries in the UN General Assembly

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Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1536.

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Length: 33 pages
Date of creation: Jul 2009
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Handle: RePEc:kie:kieliw:1536

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Related research
Keywords: aid allocation; aid channels; donor motives; Germany; Tobit models;

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Find related papers by JEL classification:
F35 - International Economics - - International Finance - - - Foreign Aid

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  1. Peter Nunnenkamp & Rainer Thiele, 2006. "Targeting Aid to the Needy and Deserving: Nothing But Promises?," The World Economy, Blackwell Publishing, vol. 29(9), pages 1177-1201, 09. [Downloadable!] (restricted)
  2. Rainer Thiele & Peter Nunnenkamp & Axel Dreher, 2007. "Do Donors Target Aid in Line with the Millennium Development Goals? A Sector Perspective of Aid Allocation," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 143(4), pages 596-630, December. [Downloadable!] (restricted)
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  3. Robert K. Fleck & Christopher Kilby, 2006. "How Do Political Changes Influence US Bilateral Aid Allocations? Evidence from Panel Data," Review of Development Economics, Blackwell Publishing, vol. 10(2), pages 210-223, 05. [Downloadable!] (restricted)
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  4. Arnab Acharya & Ana de Lima & Mick Moore, 2006. "Proliferation and fragmentation: Transactions costs and the value of aid," The Journal of Development Studies, Taylor and Francis Journals, vol. 42(1), pages 1-21, January. [Downloadable!] (restricted)
  5. SAWADA Yasuyuki & YAMADA Hiroyuki & KUROSAKI Takashi, 2008. "Is Aid Allocation Consistent with Global Poverty Reduction?: A Cross-Donor Comparison," Discussion papers 08025, Research Institute of Economy, Trade and Industry (RIETI). [Downloadable!]
  6. Alesina, Alberto & Dollar, David, 2000. " Who Gives Foreign Aid to Whom and Why?," Journal of Economic Growth, Springer, vol. 5(1), pages 33-63, March. [Downloadable!] (restricted)
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  7. Dollar, David & Levin, Victoria, 2006. "The Increasing Selectivity of Foreign Aid, 1984-2003," World Development, Elsevier, vol. 34(12), pages 2034-2046, December. [Downloadable!] (restricted)
  8. Anna Fruttero & Varun Gauri, 2005. "The Strategic Choices of NGOs: Location Decisions in Rural Bangladesh1," The Journal of Development Studies, Taylor and Francis Journals, vol. 41(5), pages 759-787, July. [Downloadable!] (restricted)
  9. Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2008. "Does US aid buy UN general assembly votes? A disaggregated analysis," Public Choice, Springer, vol. 136(1), pages 139-164, July. [Downloadable!] (restricted)
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  10. Younas, Javed, 2008. "Motivation for bilateral aid allocation: Altruism or trade benefits," European Journal of Political Economy, Elsevier, vol. 24(3), pages 661-674, September. [Downloadable!] (restricted)
  11. Bondonio, Daniele, 2002. "Evaluating the Employment Impact of Business Incentive Programs in EU Disadvantaged Areas. A case from Northern Italy," P.O.L.I.S. department's Working Papers 27, Department of Public Policy and Public Choice - POLIS. [Downloadable!]
  12. Eric Neumayer, 2005. "Is the Allocation of Food Aid Free from Donor Interest Bias?," The Journal of Development Studies, Taylor and Francis Journals, vol. 41(3), pages 394-411, April. [Downloadable!] (restricted)
  13. Baulch, Bob, 2006. "Aid distribution and the MDGs," World Development, Elsevier, vol. 34(6), pages 933-950, June. [Downloadable!] (restricted)
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