Of Donor Coordination, Free-Riding, Darlings, and Orphans: The dependence of bilateral aid on other bilateral giving
Using data from 1988 to 2007, we examine to what extent bilateral aid flows of an individual donor to a country depend on aid flows from all other bilateral and multilateral donors to that country. We thereby want to assess to what extent donor coordination, free-riding, selectivity, specialization, and common donor motivations drive bilateral aid allocation as these determinants would point to different dependence structures. Using approaches from spatial econometrics and controlling for endogeneity, we find that other bilateral flows lead to a significant increase in aid flows from a particular donor. The effects are particularly pronounced for recipients in Africa and the Middle East and socalled donor ‘orphans’ who seem to be collectively shunned by bilateral aid donors. The positive dependence also seems be related to donors following the lead of the largest donors. Over time, the positive dependence has become smaller. Overall the results suggest that donor coordination and free-riding are quantitatively less important than common donor interests and selectivity.
|Date of creation:||18 Mar 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +49 551 39 14066
Fax: + 49 551 39 14059
Web page: http://www.uni-goettingen.de/en/82144.html
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Timothy D. Lane & Leslie Lipschitz & Cristina Arellano & Ales Bulir, 2005.
"The Dynamic Implications of Foreign Aid and its Variability,"
IMF Working Papers
05/119, International Monetary Fund.
- Arellano, Cristina & Bulír, Ales & Lane, Timothy & Lipschitz, Leslie, 2009. "The dynamic implications of foreign aid and its variability," Journal of Development Economics, Elsevier, vol. 88(1), pages 87-102, January.
- Lisa Chauvet & Patrick Guillaumont, 2011.
"Aid, Volatility and Growth Again. When Aid Volatility Matters and When it Does Not,"
- Lisa Chauvet & Patrick Guillaumont, 2009. "Aid, Volatility, and Growth Again: When Aid Volatility Matters and When it Does Not," Review of Development Economics, Wiley Blackwell, vol. 13(s1), pages 452-463, 08.
- Chauvet, Lisa & Guillaumont, Patrick, 2009. "Aid, volatility, and growth again : when aid volatility matters and when it does not," Economics Papers from University Paris Dauphine 123456789/5400, Paris Dauphine University.
- Patrick GUILLAUMONT & Lisa CHAUVET, 2007. "Aid, Volatility and Growth Again When Aid Volatility Matters and When it Does Not," Working Papers 200707, CERDI.
- Chauvet, Lisa & Guillaumont, Patrick, 2008. "Aid, Volatility and Growth Again: When Aid Volatility Matters and When It Does Not," Working Paper Series RP2008/78, World Institute for Development Economic Research (UNU-WIDER).
- Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann D. & Stephan Klasen & Mario Larch, 2009.
"Does German Development Aid Promote German Exports?,"
German Economic Review,
Verein für Socialpolitik, vol. 10, pages 317-338, 08.
- Martínez-Zarzoso, Inmaculada & Nowak-Lehmann D., Felicitas & Klasen, Stefan & Larch, Mario, 2008. "Does German Development Aid Promote German Exports?," Proceedings of the German Development Economics Conference, Zurich 2008 26, Verein für Socialpolitik, Research Committee Development Economics.
- Inmaculada Martínez Zarzoso & Felictas Nowak-Lehmann D. & Stephan Klasen & Mario Larch, 2008. "Does German Development Aid Promote German Exports?," Ibero America Institute for Econ. Research (IAI) Discussion Papers 170, Ibero-America Institute for Economic Research.
- Finn Tarp & Christian F. Bach & Henrik Hansen & Søren Baunsgaard, 1998. "Danish Aid Policy: Theory and Empirical Evidence," Discussion Papers 98-06, University of Copenhagen. Department of Economics.
- Anke Hoeffler & Verity Outram, 2008. "Need, Merit or Self-Interest - What Determines the Allocation of Aid?," Economics Series Working Papers CSAE WPS/2008-19, University of Oxford, Department of Economics.
- William Easterly, 2002. "The cartel of good intentions: The problem of bureaucracy in foreign aid," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 5(4), pages 223-250.
- I�aki Aldasoro & Peter Nunnenkamp & Rainer Thiele, 2010.
"Less aid proliferation and more donor coordination? The wide gap between words and deeds,"
Journal of International Development,
John Wiley & Sons, Ltd., vol. 22(7), pages 920-940.
- Iñaki Aldasoro & Peter Nunnenkamp & Rainer Thiele, 2009. "Less Aid Proliferation and More Donor Coordination? The Wide Gap between Words and Deeds," Kiel Working Papers 1516, Kiel Institute for the World Economy.
- Wang, Wei & Lee, Lung-fei, 2013. "Estimation of spatial panel data models with randomly missing data in the dependent variable," Regional Science and Urban Economics, Elsevier, vol. 43(3), pages 521-538.
- KIMURA Hidemi & SAWADA Yasuyuki & MORI Yuko, 2007.
"Aid Proliferation and Economic Growth: A Cross-Country Analysis,"
07044, Research Institute of Economy, Trade and Industry (RIETI).
- Kimura, Hidemi & Mori, Yuko & Sawada, Yasuyuki, 2012. "Aid Proliferation and Economic Growth: A Cross-Country Analysis," World Development, Elsevier, vol. 40(1), pages 1-10.
- Burnside, Craig & Dollar, David, 1997.
"Aid, policies, and growth,"
Policy Research Working Paper Series
1777, The World Bank.
- John Hudson & Paul Mosley, 2007.
"Aid Volatility, Policy and Development,"
2007015, The University of Sheffield, Department of Economics, revised Oct 2007.
- Collier, Paul & Dollar, David, 1999.
"Aid allocation and poverty reduction,"
Policy Research Working Paper Series
2041, The World Bank.
- Knack, Stephen & Rogers, F. Halsey & Eubank, Nicholas, 2010.
"Aid quality and donor rankings,"
Policy Research Working Paper Series
5290, The World Bank.
- Choi, In, 2001. "Unit root tests for panel data," Journal of International Money and Finance, Elsevier, vol. 20(2), pages 249-272, April.
- Anke Hoeffler & Verity Outram, 2008. "Need, Merit or Self-Interest - What Determines the Allocation of Aid?," CSAE Working Paper Series 2008-19, Centre for the Study of African Economies, University of Oxford.
- Stefaan Marysse & An Ansoms & Danny Cassimon, 2007.
"The Aid 'Darlings' and 'Orphans' of the Great Lakes Region in Africa,"
The European Journal of Development Research,
Taylor and Francis Journals, vol. 19(3), pages 433-458.
- Cassimon, Danny & Ansoms, An & Marysse, Stefaan, 2006. "The Aid 'Darlings' and 'Orphans' of the Great Lakes Region in Africa," IOB Discussion Papers 2006.10, Universiteit Antwerpen, Institute of Development Policy and Management (IOB).
- Wood, Adrian, 2008.
"Looking Ahead Optimally in Allocating Aid,"
Elsevier, vol. 36(7), pages 1135-1151, July.
- Knack, Stephen & Rahman, Aminur, 2007.
"Donor fragmentation and bureaucratic quality in aid recipients,"
Journal of Development Economics,
Elsevier, vol. 83(1), pages 176-197, May.
- Knack, Stephen & Rahman, Aminur, 2004. "Donor fragmentation and bureaucratic quality in aid recipients," Policy Research Working Paper Series 3186, The World Bank.
- Bulír, Ales & Hamann, A. Javier, 2008.
"Volatility of Development Aid: From the Frying Pan into the Fire?,"
Elsevier, vol. 36(10), pages 2048-2066, October.
- A. Javier Hamann & Ales Bulir, 2006. "Volatility of Development Aid; From the Frying Pan Into the Fire?," IMF Working Papers 06/65, International Monetary Fund.
- Felicitas Nowak-Lehmann & Axel Dreher & Dierk Herzer & Stephan Klasen & Inmaculada Martínez-Zarzoso, 2012. "Does foreign aid really raise per capita income? A time series perspective," Canadian Journal of Economics, Canadian Economics Association, vol. 45(1), pages 288-313, February.
- Wei Wang & Lung‐Fei Lee, 2013. "Estimation of spatial autoregressive models with randomly missing data in the dependent variable," Econometrics Journal, Royal Economic Society, vol. 16(1), pages 73-102, 02.
- Frot, Emmanuel & Santiso, Javier, 2009.
"Herding in Aid Allocation,"
SITE Working Paper Series
5, Stockholm Institute of Transition Economics, Stockholm School of Economics, revised 02 Oct 2009.
- Raechelle Mascarenhas & Todd Sandler, 2006. "Do donors cooperatively fund foreign aid?," The Review of International Organizations, Springer, vol. 1(4), pages 337-357, December.
When requesting a correction, please mention this item's handle: RePEc:got:gotcrc:137. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dominik Noe)
If references are entirely missing, you can add them using this form.