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Are 'New' Donors Different?

Author

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  • Axel Dreher
  • Peter Nunnenkamp
  • Rainer Thiele

Abstract

Major DAC donors are widely criticized for weak targeting of aid, selfish aid motives and insufficient coordination. The emergence of an increasing number of new donors may further complicate the coordination of international aid efforts. On the other hand, new donors (many of which were aid recipients until recently) may have competitive advantages in allocating aid according to need and merit. Project-level data on aid by new donors, as collected by the PLAID initiative, allow for empirical analyses comparing the allocation behavior of new versus old donors. We employ Probit and Tobit models and test for significant differences in the distribution of aid by new and old donors across recipient countries. We find that new donors (i) focus on closer neighbors, (ii) care less for recipient need, (iii) exhibit a weaker bias towards badly governed countries, (iv) respond to disasters, but with fewer resources than old donors, and (v) do not pursue commercial self interest.

Suggested Citation

  • Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2010. "Are 'New' Donors Different?," KOF Working papers 10-255, KOF Swiss Economic Institute, ETH Zurich.
  • Handle: RePEc:kof:wpskof:10-255
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    File URL: http://dx.doi.org/10.3929/ethz-a-006070989
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    References listed on IDEAS

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    5. Eric Neumayer, 2004. "Arab-related Bilateral and Multilateral Sources of Development Finance: Issues, Trends, and the Way Forward," The World Economy, Wiley Blackwell, vol. 27(2), pages 281-300, February.
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    8. Christopher Kilby, 2009. "Donor influence in international financial institutions: Deciphering what alignment measures measure," Villanova School of Business Department of Economics and Statistics Working Paper Series 8, Villanova School of Business Department of Economics and Statistics.
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    Cited by:

    1. Daniele Pianeselli, 2016. "Does The one who pays the piper really call the tune? OECD and Chinese aid to infrastructure in Sub-Saharan Africa," Departmental Working Papers of Economics - University 'Roma Tre' 0204, Department of Economics - University Roma Tre.

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    Keywords

    Aid allocation; New donors; Donor motives; Probit; Tobit;

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