IDEAS home Printed from https://ideas.repec.org/p/got/gotcrc/168.html

Of Donor Coordination, Free-Riding, Darlings, and Orphans: The dependence of bilateral aid on other bilateral giving

Author

Listed:
  • Ronald B. Davies

    (University College Dublin)

  • Stephan Klasen

    (Georg-August-University Göttingen)

Abstract

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 in that year. 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 so-called donor ‘orphans’ who seem to be collectively shunned by bilateral aid donors. The positive dependence also seems to 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.

Suggested Citation

  • Ronald B. Davies & Stephan Klasen, 2015. "Of Donor Coordination, Free-Riding, Darlings, and Orphans: The dependence of bilateral aid on other bilateral giving," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 168, Courant Research Centre PEG.
    • Handle: RePEc:got:gotcrc:168
    as

    Download full text from publisher

    File URL: http://www2.vwl.wiso.uni-goettingen.de/courant-papers/CRC-PEG_DP_168.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. is not listed on IDEAS
    2. Peter Nunnenkamp & Albena Sotirova & Rainer Thiele, 2016. "Do Aid Donors Specialize and Coordinate within Recipient Countries? The case of Malawi," Development Policy Review, Overseas Development Institute, vol. 34(6), pages 831-849, November.
    3. Bunte, Jonas B. & Kinne, Brandon J., 2025. "Strategic interdependence in sovereign lending," European Journal of Political Economy, Elsevier, vol. 89(C).
    4. 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.
    5. Eger, Jens & Öhler, Hannes & Rudolph, Alexandra, 2018. "Is the sectoral aid allocation within countries need-oriented?," IDOS Discussion Papers 17/2018, German Institute of Development and Sustainability (IDOS).
    6. Johannes Becker & Ronald B. Davies, 2015. "Learning to Tax ?- Interjurisdictional Tax Competition under Incomplete Information," Working Papers 201519, School of Economics, University College Dublin.
    7. Ha Hoang, 2014. "Aid darling and the European Union’s aid allocation policy: the case of Vietnam," Asia Europe Journal, Springer, vol. 12(3), pages 301-324, September.
    8. Kohnert, Dirk, 2015. "Donor’s double talk undermines African agency: Comparative study of civic agency in Burkina Faso and Togo," EconStor Conference Papers 120921, ZBW - Leibniz Information Centre for Economics.
    9. Liam Swiss & Stephen Brown, 2015. "The aid orphan myth," Third World Quarterly, Taylor & Francis Journals, vol. 36(2), pages 240-256, February.
    10. Jose Antonio Alonso & Ana Luiza Cortez & Stephan Klasen, 2014. "LDC and other country groupings: How useful are current approaches to classify countries in a more hetergeneous developing world?," CDP Background Papers 021, United Nations, Department of Economics and Social Affairs.
    11. Fuchs, Andreas & Dreher, Axel & Nunnenkamp, Peter, 2014. "Determinants of Donor Generosity: A Survey of the Aid Budget Literature," World Development, Elsevier, vol. 56(C), pages 172-199.
    12. Johannes Becker & Ronald B. Davies, 2013. "Learning and international policy diffusion: the case of corporate tax policy," Working Papers 1319, Oxford University Centre for Business Taxation.
    13. Jung, Yunji & Kim, Juno & Kim, Kyunghun, 2024. "Whom is economic aid meant for? The push vs. pull determinant factors of official development assistance," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 173-195.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:got:gotcrc:168. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dominik Noe (email available below). General contact details of provider: http://www.uni-goettingen.de/en/82144.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.