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The Needy Donor: An Empirical Analysis of India’s Aid Motives

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  • Fuchs, Andreas
  • Vadlamannati, Krishna Chaitanya

Abstract

With the intension of understanding why poor countries provide aid to other developing countries, we analyze aid commitments by India’s Ministry of External Affairs to 125 countries over the 2008–10 period. Our findings are partially in line with our expectations of the behavior of a “needy” donor. Commercial and political self-interests dominate India’s aid allocation. We find the importance of political interests to be significantly larger for India than for all donors of the Development Assistance Committee. Moreover, countries that are geographically closer are favored, and countries at a similar developmental stage are more likely to enter India’s aid program.

Suggested Citation

  • Fuchs, Andreas & Vadlamannati, Krishna Chaitanya, 2013. "The Needy Donor: An Empirical Analysis of India’s Aid Motives," World Development, Elsevier, vol. 44(C), pages 110-128.
  • Handle: RePEc:eee:wdevel:v:44:y:2013:i:c:p:110-128
    DOI: 10.1016/j.worlddev.2012.12.012
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    3. Finn Ole Semrau & Rainer Thiele, 2017. "Brazil's Development Cooperation: Following in China's and India's Footsteps?," Journal of International Development, John Wiley & Sons, Ltd., vol. 29(3), pages 287-307, April.
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    6. Dreher, Axel & Fuchs, Andreas & Parks, Bradley & Strange, Austin M. & Tierney, Michael J., 2016. "Apples and Dragon Fruits: The Determinants of Aid and Other Forms of State Financing from China to Africa," Working Papers 0620, University of Heidelberg, Department of Economics.
    7. Strange, Austin M. & Parks , Bradley & Tierney, Michael J. & Fuchs, Andreas & Dreher , Axel, 2014. "Tracking Under-Reported Financial Flows: China’s Development Finance and the Aid-Conflict Nexus Revisited," Working Papers 0553, University of Heidelberg, Department of Economics.
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    11. Marlène GUILLON & Jacky MATHONNAT, 2017. "Is there a strategy in China’s health official development assistance to African countries?," Working Papers 201710, CERDI.
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    More about this item

    Keywords

    foreign aid; new donors; aid allocation; South–South Cooperation; India;

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid

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