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Who Gives Aid to Whom and When?: Aid Accelerations, Shocks and Policies

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  • Tilman Brück
  • Guo Xu

Abstract

We address the pitfalls of averaging by exploiting the longitudinal variation in aid to identify sudden and sharp increases in aid flows. Focusing on specific events, we test if aid accelerations correspond to policies and shocks in the recipient country. For a large sample of 145 recipient countries and 33 donors from 1960- 2007, we find that positive regime changes and wars are significant predictors of aid accelerations. Disaggregating aid flows by donors, we find indicative evidence for competing allocation rules, particularly among European donors. We argue that drivers of aid accelerations differ from drivers of average aid flows - a distinction that can reconcile some of the ambiguous empirical results in the aid literature.

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  • Tilman Brück & Guo Xu, 2011. "Who Gives Aid to Whom and When?: Aid Accelerations, Shocks and Policies," Discussion Papers of DIW Berlin 1133, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp1133
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    Cited by:

    1. 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.
    2. repec:elg:eechap:15325_15 is not listed on IDEAS
    3. Andreas Fuchs & Peter Nunnenkamp & Hannes Öhler, 2015. "Why Donors of Foreign Aid Do Not Coordinate: The Role of Competition for Export Markets and Political Support," The World Economy, Wiley Blackwell, vol. 38(2), pages 255-285, February.
    4. repec:eee:ecanpo:v:54:y:2017:i:c:p:105-111 is not listed on IDEAS
    5. Tilman Brück & Olaf J de Groot & Friedrich Schneider, 2011. "The economic costs of the German participation in the Afghanistan war," Journal of Peace Research, Peace Research Institute Oslo, vol. 48(6), pages 793-805, November.
    6. Hicks, Daniel L. & Hicks, Joan Hamory & Maldonado, Beatriz, 2016. "Women as policy makers and donors: Female legislators and foreign aid," European Journal of Political Economy, Elsevier, vol. 41(C), pages 46-60.
    7. Michael Brzoska & Raphael Bossong & Eric van Um, 2011. "Security Economics in the European Context: Implications of the EUSECON Project," Economics of Security Working Paper Series 58, DIW Berlin, German Institute for Economic Research.
    8. Young, Andrew T. & Sheehan, Kathleen M., 2014. "Foreign aid, institutional quality, and growth," European Journal of Political Economy, Elsevier, vol. 36(C), pages 195-208.
    9. Hagen, Rune Jansen, 2014. "Rents and the Political Economy of Development Aid," Working Papers in Economics 07/14, University of Bergen, Department of Economics.

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    Keywords

    ODA; Growth Accelerations; Policies;

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General

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