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The Determinants of Aid in the Post-Cold War Era

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  • Subhayu Bandyopadhyay

    (West Virginia University and IZA)

Abstract

This paper estimates the responsiveness of aid to recipient countries’ economic and physical needs, civil/political rights, and government effectiveness. We look exclusively at the post-Cold War era and control for the political, strategic, and other considerations of donors with fixed effects. In general, we find that aid and per capita income were negatively related, while aid was positively related with infant mortality, rights, and government effectiveness.

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File URL: http://www.be.wvu.edu/phd_economics/pdf/06-14.pdf
File Function: First version, 2006
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Bibliographic Info

Paper provided by Department of Economics, West Virginia University in its series Working Papers with number 06-14 Classification- JEL: F35.

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Length: 25 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:wvu:wpaper:06-14

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Web page: http://www.be.wvu.edu/phd_economics/
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Keywords: Foreign Aid;

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  1. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, American Economic Association, vol. 90(4), pages 847-868, September.
  2. Dowling, J. M. & Hiemenz, Ulrich, 1985. "Biases in the allocation of foreign aid: Some new evidence," World Development, Elsevier, Elsevier, vol. 13(4), pages 535-541, April.
  3. Alesina, Alberto & Dollar, David, 2000. " Who Gives Foreign Aid to Whom and Why?," Journal of Economic Growth, Springer, Springer, vol. 5(1), pages 33-63, March.
  4. Boone, Peter, 1996. "Politics and the effectiveness of foreign aid," European Economic Review, Elsevier, Elsevier, vol. 40(2), pages 289-329, February.
  5. Maizels, Alfred & Nissanke, Machiko K., 1984. "Motivations for aid to developing countries," World Development, Elsevier, Elsevier, vol. 12(9), pages 879-900, September.
  6. Wall, Howard J., 1995. "The allocation of official development assistance," Journal of Policy Modeling, Elsevier, Elsevier, vol. 17(3), pages 307-314, June.
  7. Trumbull, William N & Wall, Howard J, 1994. "Estimating Aid-Allocation Criteria with Panel Data," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 104(425), pages 876-82, July.
  8. Raghuram G. Rajan & Arvind Subramanian, 2008. "Aid and Growth: What Does the Cross-Country Evidence Really Show?," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 643-665, November.
  9. Burnside, Craig & Dollar, David, 2004. "Aid, policies, and growth : revisiting the evidence," Policy Research Working Paper Series 3251, The World Bank.
  10. Alesina, Alberto & Weder, Beatrice, 2002. "Do Corrupt Governments Receive Less Foreign Aid?," Scholarly Articles 4553011, Harvard University Department of Economics.
  11. Raghuram Rajan & Arvind Subramanian, 2005. "Aid and Growth," IMF Working Papers, International Monetary Fund 05/127, International Monetary Fund.
  12. Kosack, Stephen, 2003. "Effective Aid: How Democracy Allows Development Aid to Improve the Quality of Life," World Development, Elsevier, Elsevier, vol. 31(1), pages 1-22, January.
  13. William Easterly & Ross Levine & David Roodman, 2004. "Aid, Policies, and Growth: Comment," American Economic Review, American Economic Association, American Economic Association, vol. 94(3), pages 774-780, June.
  14. Eric Neumayer, 2003. "Do Human Rights Matter in Bilateral Aid Allocation? A Quantitative Analysis of 21 Donor Countries," Social Science Quarterly, Southwestern Social Science Association, Southwestern Social Science Association, vol. 84(3), pages 650-666.
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Cited by:
  1. repec:ebl:ecbull:v:15:y:2008:i:8:p:1-13 is not listed on IDEAS
  2. Robert K. Fleck & Christopher Kilby, 2009. "Changing Aid Regimes? U.S. Foreign Aid from the Cold War to the War on Terror," Villanova School of Business Department of Economics and Statistics Working Paper Series, Villanova School of Business Department of Economics and Statistics 1, Villanova School of Business Department of Economics and Statistics.
  3. Wolff, Hendrik & Chong, Howard & Auffhammer, Maximilian, 2008. "Consequences of data error in aggregate indicators : evidence from the humand development index," CUDARE Working Paper Series, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy 1051, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
  4. Harrigan, Jane & Wang, Chengang, 2011. "A New Approach to the Allocation of Aid Among Developing Countries: Is the USA Different from the Rest?," World Development, Elsevier, Elsevier, vol. 39(8), pages 1281-1293, August.
  5. Jonathan Munemo & Subhayu Bandyopadhyay & Arabinda Basistha, 2007. "Foreign aid and export performance: a panel data analysis of developing countries," Working Papers, Federal Reserve Bank of St. Louis 2007-023, Federal Reserve Bank of St. Louis.
  6. Javed Younas & Subhayu Bandyopadhyay, 2009. "Do donors care about declining trade revenue from liberalization? an analysis of bilateral aid allocation," Review, Federal Reserve Bank of St. Louis, Federal Reserve Bank of St. Louis, issue May, pages 141-154.
  7. Szent-Ivanyi, Balazs, 2010. "Aid Allocation of the Emerging Central and Eastern European Donors," MPRA Paper 30234, University Library of Munich, Germany.
  8. Fumitaka Furuoka, 2008. "A Dynamic Model of Foreign Aid Allocation," Economics Bulletin, AccessEcon, vol. 15(8), pages 1-13.
  9. Era Dabla-Norris & Camelia Minoiu & Luis-Felipe Zanna, 2010. "Business Cycle Fluctuations, Large Shocks, and Development Aid," IMF Working Papers, International Monetary Fund 10/240, International Monetary Fund.
  10. Hlavac, Marek, 2007. "Determinants of Multilateral Official Development Assistance: Evidence from a Panel Study of Countries in Sub-Saharan Africa," MPRA Paper 24243, University Library of Munich, Germany.
  11. Badassa Tadasse & Bichaka Fayissa, 2009. "Determinants of the Allocation of US Aid forTrade," Working Papers, Middle Tennessee State University, Department of Economics and Finance 200901, Middle Tennessee State University, Department of Economics and Finance.
  12. Wolff, Hendrik & Chong, Howard & Auffhammer, Maximilian, 2009. "Human Development Index: Are Developing Countries Misclassified? (former title: "Consequences of Data Error in Aggregate Indicators: Evidence from the Human Development Index)," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin, Agricultural and Applied Economics Association 49763, Agricultural and Applied Economics Association.
  13. Jonathan Munemo, 2011. "Foreign aid and export diversification in developing countries," The Journal of International Trade & Economic Development, Taylor & Francis Journals, Taylor & Francis Journals, vol. 20(3), pages 339-355.

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