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Does Happiness Affect the Bilateral Aid Flows Between Donor and Recipient Countries?

Listed author(s):
  • B Mak Arvin

    (Department of Economics, Trent University, Ontario, Canada)

  • Byron Lew

    (Department of Economics, Trent University, Ontario, Canada)

The literature on the economics of well-being and happiness is currently growing at a remarkable rate. In separate studies, happiness has been linked to income, health, age, political and economic freedom, unemployment, inflation, self-employment, voluntary work, marriage, and even watching television. None of these studies have linked happiness to foreign aid disbursements. Using data from the Organisation for Economic Co-operation and Development, the World Bank and the World Database of Happiness, we construct an empirical model of aid, in which a host of donor interest and recipient need motives impact on the level of assistance a donor country gives. However, unlike other studies of aid, we concentrate on three factors in donor aid disbursement: the degree of happiness of the donor and the recipient; geographical proximity between the two countries; and competition between donors in providing aid. Using a number of different specifications, we test, in particular, the validity of the hypothesis that donor and recipient happiness are important determinants of levels of aid.La littérature sur l’économie du bien-être s’accroît à une vitesse remarquable. Différentes études ont montré le lien entre le bonheur et les revenus, la santé, l’âge, la liberté économique et politique, le chômage, l’inflation, le travail indépendant, le bénévolat, le mariage et même l’acte de regarder la télévision. Aucune de ces études n’a fait le lien entre le bonheur et les dépenses d’aides à l’étranger. À partir de données provenant de l’OCDE, de la Banque Mondiale et de la Base de Données Mondiales sur le Bonheur, nous développons un modèle empirique d’aide dans lequel un grand nombre de motivations relatives aux intérêts des pays donateurs et aux besoins des pays receveurs ont un impact sur le niveau d’aide fournie par le pays donateur. Cependant, contrairement à d’autres études sur l’aide, nous nous concentrons sur trois facteurs influençant les dépenses d’aide réalisées par les pays donateurs: le degré de bonheur du pays donateur et du pays bénéficiaire, la proximité géographique des deux pays, la concurrence à laquelle se livrent les donateurs pour fournir l’aide. En mobilisant un ensemble de spécifications, nous testons notamment la validité de l’hypothèse selon laquelle le bonheur du pays donateur et celui du bénéficiaire sont d’importants déterminants du niveau d’aide.

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Article provided by Palgrave Macmillan & European Association of Development Research and Training Institutes (EADI) in its journal European Journal of Development Research.

Volume (Year): 22 (2010)
Issue (Month): 4 (September)
Pages: 546-563

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Handle: RePEc:pal:eurjdr:v:22:y:2010:i:4:p:546-563
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