A Dynamic Model of Foreign Aid Allocation
This paper uses the Generalized Method of Moments (GMM)-type of estimator of Arellano and Bond (1991) to analyze the dynamics of adjustment in foreign aid allocation over the period 2000-2005. The empirical findings reveal a complex nature of foreign aid allocations. On the one hand, the static panel data models indicated that aid donors tended to provide larger amounts of foreign aid to the poorer developing nations which were in a greater need for the development assistance. On the other hand, the dynamic panel data models indicated contradicted results, where relatively wealthy developing countries have received larger amounts of foreign aid.
Volume (Year): 15 (2008)
Issue (Month): 8 ()
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- Tom Doan, "undated". "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- Wansbeek, Tom & Kapteyn, Arie, 1989. "Estimation of the error-components model with incomplete panels," Journal of Econometrics, Elsevier, vol. 41(3), pages 341-361, July. Full references (including those not matched with items on IDEAS)
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