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Are NGOs the Better Donors? A Case Study of Aid Allocation for Sweden

This paper analyzes whether and to what extent non-governmental organizations (NGOs) outperform official donors by allocating aid in a way that renders effective poverty alleviation more likely. We employ Probit and Tobit models and make use of an exceptionally detailed database that allows an assessment of the allocation of Swedish NGO aid in comparison to the allocation of Swedish official aid. Our results show that NGOs are more selective when deciding about which countries to enter at all. Moreover, in contrast to NGO aid, there is some evidence that political and commercial motives matter for the selection of ODA recipients. However, the Swedish case also supports the skeptical view according to which NGOs are unlikely to outperform official donors by providing better targeted aid when it comes to the allocation across recipients having passed the eligibility test.

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Paper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 07-180.

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Length: 39 pages
Date of creation: Nov 2007
Date of revision:
Handle: RePEc:kof:wpskof:07-180
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  1. Cohen, Daniel & Sachs, Jeffrey, 1986. "Growth and external debt under risk of debt repudiation," European Economic Review, Elsevier, vol. 30(3), pages 529-560, June.
  2. Alberto Alesina & Beatrice Weder, 2002. "Do Corrupt Governments Receive Less Foreign Aid?," American Economic Review, American Economic Association, vol. 92(4), pages 1126-1137, September.
  3. McGillivray, Mark, 2003. "Aid Effectiveness and Selectivity: Integrating Multiple Objectives into Aid Allocations," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  4. Sajeda Amin & Ashok S. Rai & Giorgio Topa, 1999. "Does Microcredit Reach the Poor and Vulnerable? Evidence from Northern Bangladesh," CID Working Papers 28, Center for International Development at Harvard University.
  5. Nunnenkamp, Peter & Thiele, Rainer, 2006. "Targeting aid to the needy and deserving : nothing but promises?," Open Access Publications from Kiel Institute for the World Economy 3875, Kiel Institute for the World Economy (IfW).
  6. McGillivray, Mark & Feeny, Simon & Hermes, Niels & Lensink, Robert, 2005. "It Works; It Doesn't; It Can, But That Depends?: 50 Years of Controversy over the Macroeconomic Impact of Development Aid," Working Paper Series RP2005/54, World Institute for Development Economic Research (UNU-WIDER).
  7. Collier, Paul & Dollar, David, 2002. "Aid allocation and poverty reduction," European Economic Review, Elsevier, vol. 46(8), pages 1475-1500, September.
  8. Daniel Cohen & Pierre Jacquet & Helmut Reisen, 2007. "Loans or Grants?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 143(4), pages 764-782, December.
  9. Michael Clemens & Steven Radelet & Rikhil Bhavnani, 2004. "Counting Chickens When They Hatch: The Short-term Effect of Aid on Growth," Working Papers 44, Center for Global Development.
  10. Gustavo Canavire & Peter Nunnenkamp & Rainer Thiele & Luis Triveño, 2005. "Assessing the Allocation of Aid: Developmental Concerns and the Self-Interest of Donors," Kiel Working Papers 1253, Kiel Institute for the World Economy.
  11. Oecd, 2003. "Aid Effectiveness and Selectivity: Integrating Multiple Objectives into Aid Allocations," OECD Journal on Development, OECD Publishing, vol. 4(3), pages 7-40.
  12. Collier, Paul & Hoeffler, Anke, 2002. "Aid, policy, and growth in post-conflict societies," Policy Research Working Paper Series 2902, The World Bank.
  13. Alesina, Alberto & Dollar, David, 2000. " Who Gives Foreign Aid to Whom and Why?," Journal of Economic Growth, Springer, vol. 5(1), pages 33-63, March.
  14. Robinson, Mark & Riddell, Roger C., 1995. "Non-Governmental Organizations and Rural Poverty Alleviation," OUP Catalogue, Oxford University Press, number 9780198233305.
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