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Aid Delivery through Non-governmental Organisations: Does the Aid Channel Matter for the Targeting of Swedish Aid?

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  • Axel Dreher
  • Florian Mölders
  • Peter Nunnenkamp

Abstract

Abstract This paper analyses whether aid channelled through non-governmental organisations (NGOs) is less affected by selfish donor motivations and better targeted to needy recipient countries than aid distributed by state agencies. We employ Tobit (and Probit) models and make use of an exceptionally detailed database that allows an assessment of the allocation of Swedish aid channelled through NGOs in comparison to the allocation of Swedish official aid. Our analysis provides mixed results. On the one hand, NGOs appear to be altruistic as far as available indicators on political and commercial motivations of aid can tell. On the other hand, needs-based targeting of aid by NGOs turns out to be surprisingly weak. GDP per capita of recipient countries shapes the allocation of official aid, but not that of aid channelled through NGOs. The headcount of absolute poverty has a significantly positive effect on aid allocation, but its impact is not particularly strong when NGOs are involved. Overall, the Swedish case supports the sceptical view that NGOs are not necessarily superior donors compared to state aid agencies. Copyright 2010 Blackwell Publishing Ltd. Journal compilation 2010 Blackwell Publishing Ltd.

Suggested Citation

  • Axel Dreher & Florian Mölders & Peter Nunnenkamp, 2010. "Aid Delivery through Non-governmental Organisations: Does the Aid Channel Matter for the Targeting of Swedish Aid?," The World Economy, Wiley Blackwell, vol. 33(2), pages 147-176, February.
  • Handle: RePEc:bla:worlde:v:33:y:2010:i:2:p:147-176
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    References listed on IDEAS

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    1. 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.
    2. Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2008. "Does Aid for Education Educate Children? Evidence from Panel Data," World Bank Economic Review, World Bank Group, vol. 22(2), pages 291-314, April.
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    5. 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;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(4), pages 596-630, December.
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    Citations

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    Cited by:

    1. Herzer, Dierk & Nunnenkamp, Peter, 2013. "Private Donations, Government Grants, Commercial Activities, and Fundraising: Cointegration and Causality for NGOs in International Development Cooperation," World Development, Elsevier, vol. 46(C), pages 234-251.
    2. Dreher, Axel & Nunnenkamp, Peter & Thiel, Susann & Thiele, Rainer, 2010. "Aid allocation by German NGOs: Does the degree of public refinancing matter?," Center for European, Governance and Economic Development Research Discussion Papers 92, University of Goettingen, Department of Economics.
    3. Simone Dietrich & Amanda Murdie, 2017. "Human rights shaming through INGOs and foreign aid delivery," The Review of International Organizations, Springer, vol. 12(1), pages 95-120, March.
    4. Dreher, Axel & Nunnenkamp, Peter & Thiele, Rainer, 2011. "Are ‘New’ Donors Different? Comparing the Allocation of Bilateral Aid Between nonDAC and DAC Donor Countries," World Development, Elsevier, vol. 39(11), pages 1950-1968.
    5. Gani Aldashev & Cecilia Navarra, 2017. "Development NGOs: Basic Facts," Working Papers ECARES ECARES 2017-36, ULB -- Universite Libre de Bruxelles.
    6. Acht, Martin & Omar Mahmoud, Toman & Thiele, Rainer, 2014. "Corrupt governments receive less bilateral aid: Governance and the delivery of foreign aid through non-government actors," Kiel Working Papers 1901, Kiel Institute for the World Economy (IfW).
    7. Peter Nunnenkamp & Rainer Thiele, 2009. "Sind Nichtregierungsorganisationen die besseren Entwicklungshelfer?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 10(3), pages 266-289, August.
    8. Nunnenkamp, Peter & Öhler, Hannes, 2011. "Aid Allocation through Various Official and Private Channels: Need, Merit, and Self-Interest as Motives of German Donors," World Development, Elsevier, vol. 39(3), pages 308-323, March.
    9. repec:eee:wdevel:v:97:y:2017:i:c:p:232-250 is not listed on IDEAS
    10. Fløgstad, Cathrin & Hagen, Rune Jansen, 2017. "Aid Dispersion: Measurement in Principle and Practice," World Development, Elsevier, vol. 97(C), pages 232-250.
    11. Axel Dreher & Peter Nunnenkamp & Hannes Öhler & Johannes Weisser, 2012. "Financial Dependence and Aid Allocation by Swiss NGOs: A Panel Tobit Analysis," Economic Development and Cultural Change, University of Chicago Press, vol. 60(4), pages 829-867.
    12. Reinsberg, Bernhard, 2015. "Foreign Aid Responses to Political Liberalization," World Development, Elsevier, vol. 75(C), pages 46-61.
    13. repec:elg:eechap:15325_15 is not listed on IDEAS
    14. Hagen, Rune Jansen, 2014. "Rents and the Political Economy of Development Aid," Working Papers in Economics 07/14, University of Bergen, Department of Economics.
    15. Axel Dreher & Peter Nunnenkamp & Susann Thiel & Rainer Thiele, 2010. "Aid Allocation by German NGOs," KOF Working papers 10-247, KOF Swiss Economic Institute, ETH Zurich.
    16. Acht, Martin & Mahmoud, Toman Omar & Thiele, Rainer, 2015. "Corrupt governments do not receive more state-to-state aid: Governance and the delivery of foreign aid through non-state actors," Journal of Development Economics, Elsevier, vol. 114(C), pages 20-33.
    17. Andrews, Matt, 2015. "Has Sweden Injected Realism into Public Financial Management Reforms in Partner Countries?," Working Paper Series 15-063, Harvard University, John F. Kennedy School of Government.

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