I examine in detail the motives of bilateral aid allocation decisions, as they are revealed by data on bilateral aid commitments. I identify both self-interest and recipient needs and merits motives in aid allocation. Self-interest motives are related to economic and political ties between donors and recipients. Such variables can be used to define a «bilateralism effect» in aid allocation decisions. Unsurprisingly, aid allocation net of the bilateralism effect is highly correlated with multilateral aid pattern. Perhaps more surprisingly, the bilateralism effect is adverse to the Sub-Saharan African region, in spite of its strong post-colonial ties with European donors, because trade linkages play actually a greater role than political ties. A consequence of the major role played by trade linkages is that the bilateralism effect is not necessarily adverse to aid selectivity, given that major trading partners are also on average open and relatively well performing economies.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
file. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Find related papers by JEL classification: F35 - International Economics - - International Finance - - - Foreign Aid C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models
This paper has been announced in the following NEP Reports:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.: