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Competition for Export Markets and the Allocation of Foreign Aid: The Role of Spatial Dependence among Donor Countries

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  • Barthel, Fabian
  • Neumayer, Eric
  • Nunnenkamp, Peter
  • Selaya, Pablo

Abstract

We account for competition for export markets among donor countries of foreign aid by analyzing spatial dependence in aid allocation. Employing sector-specific aid data, we find that the five largest donors react to aid giving by other donors with whom they compete in terms of exporting goods and services to a specific recipient country at both stages of their allocation of aid for economic infrastructure and production sectors. By contrast, evidence for export competition driving aid allocation is lacking for more altruistic donors and for aid in social infrastructure.

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  • Barthel, Fabian & Neumayer, Eric & Nunnenkamp, Peter & Selaya, Pablo, 2014. "Competition for Export Markets and the Allocation of Foreign Aid: The Role of Spatial Dependence among Donor Countries," World Development, Elsevier, vol. 64(C), pages 350-365.
  • Handle: RePEc:eee:wdevel:v:64:y:2014:i:c:p:350-365
    DOI: 10.1016/j.worlddev.2014.06.009
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    Cited by:

    1. Gustavo Javier Canavire‐Bacarreza & Eric Neumayer & Peter Nunnenkamp, 2015. "Why Aid is Unpredictable: An Empirical Analysis of the Gap Between Actual and Planned Aid Flows," Journal of International Development, John Wiley & Sons, Ltd., vol. 27(4), pages 440-463, 05-27.
    2. Donaubauer, Julian & Meyer, Birgit & Nunnenkamp, Peter, 2016. "Aid, Infrastructure, and FDI: Assessing the Transmission Channel with a New Index of Infrastructure," World Development, Elsevier, vol. 78(C), pages 230-245.
    3. repec:bla:ecinqu:v:55:y:2017:i:4:p:1671-1688 is not listed on IDEAS
    4. Axel Dreher & Sarah Langlotz & Silvia Marchesi, 2017. "Information Transmission And Ownership Consolidation In Aid Programs," Economic Inquiry, Western Economic Association International, vol. 55(4), pages 1671-1688, October.
    5. repec:prg:jnlpol:v:2017:y:2017:i:2:id:1135:p:179-197 is not listed on IDEAS
    6. repec:bla:jcmkts:v:55:y:2017:i:5:p:955-973 is not listed on IDEAS
    7. repec:eee:wdevel:v:106:y:2018:i:c:p:136-148 is not listed on IDEAS
    8. repec:eee:poleco:v:49:y:2017:i:c:p:164-181 is not listed on IDEAS
    9. Bickenbach, Frank & Mbelu, Asithandile & Nunnenkamp, Peter, 2017. "Is foreign aid concentrated increasingly on needy and deserving recipient countries? An analysis of Theil indices, 1995-2015," Kiel Working Papers 2078, Kiel Institute for the World Economy (IfW).
    10. Ward, Hugh & Dorussen, Han, 2015. "Public Information and Performance: The Role of Spatial Dependence in the Worldwide Governance Indicators among African Countries," World Development, Elsevier, vol. 74(C), pages 253-263.
    11. Gallemore, Caleb & Jespersen, Kristjan, 2016. "Transnational Markets for Sustainable Development Governance: The Case of REDD+," World Development, Elsevier, vol. 86(C), pages 79-94.
    12. Cécile Couharde & Fatih Karanfil & Eric Gabin Kilamaa & Luc Désiré Omgbaa, 2017. "The Importance of Oil in the Allocation of Foreign Aid: The case of the G7 donors," EconomiX Working Papers 2017-40, University of Paris Nanterre, EconomiX.

    More about this item

    Keywords

    aid allocation; sector-specific aid; export competition; spatial dependence;

    JEL classification:

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

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