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Why Donors of Foreign Aid Do Not Coordinate: The Role of Competition for Export Markets and Political Support

  • Andreas Fuchs
  • Peter Nunnenkamp
  • Hannes Öhler

Development assistance has been criticized for a lack of coordination between aid donors. This paper argues that competition for export markets and political support prevents donor countries from closer coordination of aid activities. To test these hypotheses, we perform logit and fractional logit estimations for a large sample of recipient countries and aid activities since the early 1970s. Our empirical results reveal that export competition between donors is a major impediment to aid coordination. Tough less conclusive, we also find some evidence that donors’ competition over political support prevents them from coordinating aid activities more closely

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Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1825.

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Length: 38 pages
Date of creation: Feb 2013
Date of revision:
Handle: RePEc:kie:kieliw:1825
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  1. 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.
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  8. Peter Nunnenkamp & Hannes Öhler & Rainer Thiele, 2011. "Donor Coordination and Specialization: Did the Paris Declaration Make a Difference?," Kiel Working Papers 1748, Kiel Institute for the World Economy.
  9. Jean-Claude Berthélemy, 2005. "Bilateral donors' interest vs. recipients' development motives in aid allocation : do all donors behave the same ?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00193273, HAL.
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  15. Katada, Saori N., 1997. "Two aid hegemons: Japanese-US interaction and aid allocation to Latin America and the Caribbean," World Development, Elsevier, vol. 25(6), pages 931-945, June.
  16. Finger, J M & Kreinin, M E, 1979. "A Measure of 'Export Similarity' and Its Possible Uses," Economic Journal, Royal Economic Society, vol. 89(356), pages 905-12, December.
  17. Knack,Stephen & Rahman, Aminur, 2004. "Donor fragmentation and bureaucratic quality in aid recipients," Policy Research Working Paper Series 3186, The World Bank.
  18. Voeten, Erik, 2000. "Clashes in the Assembly," International Organization, Cambridge University Press, vol. 54(02), pages 185-215, March.
  19. José Cheibub & Jennifer Gandhi & James Vreeland, 2010. "Democracy and dictatorship revisited," Public Choice, Springer, vol. 143(1), pages 67-101, April.
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