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A New Approach to the Allocation of Aid Among Developing Countries: Is the USA Different from the Rest?

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  • Harrigan, Jane
  • Wang, Chengang

Abstract

Summary This paper attempts to explain the factors that determine the geographical allocation of foreign aid. Its novelty is that it develops a rigorous theoretical model and conducts the corresponding empirical investigations based on a large panel dataset. We run regressions for different major donors (United States, Canada, France, Italy, Japan, United Kingdom, and multilateral organizations). with the explicit objective of establishing whether the United States, in light of its geopolitical hegemony, behaves differently from others. We find that all the donors respond to recipient need in their allocation of aid, but that the United States puts less emphasis on this than the other donors with the exception of Japan. We also find that the United States puts more emphasis on donor-recipient linkages than do the other donors suggesting that the United States attaches greater importance to issues of donor interest, for example, geopolitical, commercial, and other links with specific recipients.

Suggested Citation

  • 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, vol. 39(8), pages 1281-1293, August.
  • Handle: RePEc:eee:wdevel:v:39:y:2011:i:8:p:1281-1293
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    Cited by:

    1. Masaki, Takaaki, 2016. "Coups d’État and Foreign Aid," World Development, Elsevier, vol. 79(C), pages 51-68.
    2. repec:eee:poleco:v:51:y:2018:i:c:p:1-14 is not listed on IDEAS
    3. Jeffrey Overall, 2017. "Practice what you preach: the failure of the welfare state and the discovery of total equality through capitalism," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 13(1/2), pages 69-85.
    4. Harrigan, Jane, 2011. "The Political Economy of Aid Flows to North Africa," WIDER Working Paper Series 072, World Institute for Development Economic Research (UNU-WIDER).
    5. Stubbs, Thomas H. & Kentikelenis, Alexander E. & King, Lawrence P., 2016. "Catalyzing Aid? The IMF and Donor Behavior in Aid Allocation," World Development, Elsevier, vol. 78(C), pages 511-528.
    6. Christopher Selvarajah, 2014. "Foreign aid imperatives in the Greater Mekong Subregion: case studies of Australian, Japanese and Thai Aid Coordination," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 21(1), pages 23-65, June.
    7. Kumar, Ronald/R, 2011. "Role of Trade, Aid, Remittances and Financial Development in Pakistan," MPRA Paper 38871, University Library of Munich, Germany.
    8. Miller, Daniel C., 2014. "Explaining Global Patterns of International Aid for Linked Biodiversity Conservation and Development," World Development, Elsevier, vol. 59(C), pages 341-359.
    9. Dabla-Norris, Era & Minoiu, Camelia & Zanna, Luis-Felipe, 2015. "Business Cycle Fluctuations, Large Macroeconomic Shocks, and Development Aid," World Development, Elsevier, vol. 69(C), pages 44-61.
    10. Chimhowu, Admos, 2013. "Aid for Agriculture and Rural Development: a Changing Landscape with New Players and Challenges," WIDER Working Paper Series 014, World Institute for Development Economic Research (UNU-WIDER).
    11. Reinsberg, Bernhard, 2015. "Foreign Aid Responses to Political Liberalization," World Development, Elsevier, vol. 75(C), pages 46-61.
    12. Hyun-Hoon Lee & Donghyun Park & Meehwa Shin, 2015. "Do Developing-country WTO Members Receive More Aid for Trade (AfT)?," The World Economy, Wiley Blackwell, vol. 38(9), pages 1462-1485, September.
    13. de Felice, Damiano, 2015. "Diverging Visions on Political Conditionality: The Role of Domestic Politics and International Socialization in French and British Aid," World Development, Elsevier, vol. 75(C), pages 26-45.
    14. Anna Minasyan, 2016. "US Aid, US educated Leaders and Economic Ideology," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 215, Courant Research Centre PEG.
    15. Abrams M E Tagem, 2017. "Analysing the determinants of health aid allocation in sub-Saharan Africa," Discussion Papers 2017-09, University of Nottingham, CREDIT.
    16. Hermano, Víctor & Martín-Cruz, Natalia, 2013. "How to Deliver Foreign Aid? The Case of Projects Governed by the Spanish International Agency," World Development, Elsevier, vol. 43(C), pages 298-314.
    17. repec:bla:afrdev:v:29:y:2017:i:3:p:376-388 is not listed on IDEAS

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    aid allocation panel data USA donor;

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