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Explaining development aid allocation by growth

Author

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  • Hristos Doucouliagos
  • Martin Paldam

Abstract

Purpose - The purpose of this paper is to study a little researched relation: the relation from economic growth in a less developed country to the development aid it receives. Does economic growth influence donor aid allocation decisions? Design/methodology/approach - The authors’ apply two different methodologies. First, a quantitative and systematic review is presented of the literature of 30 empirical studies of aid allocation where a growth coefficient is estimated. Second, a primary study is presented of the data using a panel of 147 countries for the period 1967-2004. Findings - The growth-aid relation should be negative if humanitarian motives dominate aid allocation decisions. The result from both the meta-analysis and the primary data analysis suggests a very small effect between lagged growth and aid allocations, with a dominating positive sign. This result appears to be driven partly by the large development banks. Originality/value - No attempt has previously been made to summarize the literature on growth as a motive for giving aid. This paper offers the first attempt to do so, by presenting a meta-analysis of the empirical literature, as well as analysis of the primary data.

Suggested Citation

  • Hristos Doucouliagos & Martin Paldam, 2013. "Explaining development aid allocation by growth," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing, vol. 2(1), pages 21-41, April.
  • Handle: RePEc:eme:jepppp:v:2:y:2013:i:1:p:21-41
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    Cited by:

    1. repec:taf:vjerxx:v:109:y:2016:i:1:p:37-49 is not listed on IDEAS
    2. repec:wly:econjl:v:127:y:2017:i:605:p:f236-f265 is not listed on IDEAS
    3. repec:wly:econjl:v::y:2017:i:605:p:f236-f265 is not listed on IDEAS

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