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

Author

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  • Axel Dreher
  • Florian Moelders
  • Peter Nunnenkamp

Abstract

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.

Suggested Citation

  • Axel Dreher & Florian Moelders & Peter Nunnenkamp, 2007. "Are NGOs the Better Donors? A Case Study of Aid Allocation for Sweden," KOF Working papers 07-180, KOF Swiss Economic Institute, ETH Zurich.
  • Handle: RePEc:kof:wpskof:07-180
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    File URL: http://dx.doi.org/10.3929/ethz-a-005503059
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Dirk-Jan Koch & Ruerd Ruben, 2008. "Spatial Clustering Of NGOs: An Evolutionary Economic Geography Approach," Papers in Evolutionary Economic Geography (PEEG) 0814, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2008.
    2. World Bank & International Monetary Fund, 2010. "Global Monitoring Report 2010 : The MDGs after the Crisis," World Bank Publications, The World Bank, number 2444, December.
    3. Raschky, Paul A. & Schwindt, Manijeh, 2012. "On the channel and type of aid: The case of international disaster assistance," European Journal of Political Economy, Elsevier, vol. 28(1), pages 119-131.
    4. Nunnenkamp, Peter & Weingarth, Janina & Weisser, Johannes, 2009. "Is NGO aid not so different after all? Comparing the allocation of Swiss aid by private and official donors," European Journal of Political Economy, Elsevier, vol. 25(4), pages 422-438, December.
    5. Bjørnskov, Christian, 2010. "Do elites benefit from democracy and foreign aid in developing countries?," Journal of Development Economics, Elsevier, vol. 92(2), pages 115-124, July.
    6. Spiros Bougheas & Alessia Isopi & Trudy Owens, "undated". "How do Donors Allocate Funds to NGOs? Evidence from Uganda," Discussion Papers 12/08, University of Nottingham, CREDIT.
    7. Malki, Elli, 2008. "Put your money where your mouth is," MPRA Paper 12388, University Library of Munich, Germany.

    More about this item

    Keywords

    Aid allocation; NGO aid; ODA; Sector-specific aid;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • F35 - International Economics - - International Finance - - - Foreign Aid

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