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Aid Allocation of the Emerging Central and Eastern European Donors

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  • Szent-Ivanyi, Balazs

Abstract

The paper examines the main characteristics of the (re)emerging foreign aid policies of the Visegrád countries (the Czech Republic, Hungary, Poland, Slovakia), concentrating on the allocation of their aid resources. We adopt an econometric approach, similar to the ones used in the literature for analyzing the aid allocation of the OECD DAC donors. Using this approach, we examine the various factors that influence aid allocation of the Visegrád countries, using data for the years between 2001 and 2008. Our most important conclusion is that the amount of aid a partner county gets from the four emerging donors is not influenced by the level of poverty or the previous performance (measured by the level of economic growth or the quality of institutions) of the recipients. The main determining factor seems to be geographic proximity, as countries in the Western-Balkans and the Post-Soviet region receive much more aid from the Visegrád countries than other recipients. Historical ties (pre-1989 development relations) and international obligations in the case of Afghanistan and Iraq are also found to be significant explanatory factors. This allocation is in line with the foreign political and economic interests of these new donors. While there are clear similarities between the four donors, the paper also identifies some individual country characteristics.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 30234.

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Date of creation: 04 Sep 2010
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Handle: RePEc:pra:mprapa:30234

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Keywords: Visegrád countries; foreign aid; aid allocation; emerging donors;

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  1. Alberto Alesina & Beatrice Weder, 2002. "Do Corrupt Governments Receive Less Foreign Aid?," American Economic Review, American Economic Association, vol. 92(4), pages 1126-1137, September.
  2. Subhayu Bandyopadhyay & Howard J. Wall, 2007. "The determinants of aid in the post-cold war era," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 533-548.
  3. Alberto Alesina & David Dollar, 1998. "Who Gives Foreign Aid to Whom and Why?," NBER Working Papers 6612, National Bureau of Economic Research, Inc.
  4. Trumbull, William N & Wall, Howard J, 1994. "Estimating Aid-Allocation Criteria with Panel Data," Economic Journal, Royal Economic Society, vol. 104(425), pages 876-82, July.
  5. David Roodman, 2007. "Macro Aid Effectiveness Research: A Guide for the Perplexed," Working Papers 135, Center for Global Development.
  6. Maizels, Alfred & Nissanke, Machiko K., 1984. "Motivations for aid to developing countries," World Development, Elsevier, vol. 12(9), pages 879-900, September.
  7. Isopi, Alessia & Mavrotas, George, 2006. "Aid Allocation and Aid Effectiveness: An Empirical Analysis," Working Paper Series RP2006/07, World Institute for Development Economic Research (UNU-WIDER).
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