Bilateralism and multilateralism in official development assistance policies
AbstractI 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.
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Bibliographic InfoPaper provided by Université Panthéon-Sorbonne (Paris 1) in its series Cahiers de la Maison des Sciences Economiques with number bla04104.
Length: 26 pages
Date of creation: Oct 2004
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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; Longitudinal Data; Spatial Time Series
- C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models
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