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Bilateralism and multilateralism in official development assistance policies

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  • Jean-Claude Berthélemy

    () (TEAM)

Abstract

I examine in detail the motives of bilateral aid allocation decisions, as they are revealed by data on bilateral aid commitments. I identify both self-interest and recipient needs and merits motives in aid allocation. Self-interest motives are related to economic and political ties between donors and recipients. Such variables can be used to define a «bilateralism effect» in aid allocation decisions. Unsurprisingly, aid allocation net of the bilateralism effect is highly correlated with multilateral aid pattern. Perhaps more surprisingly, the bilateralism effect is adverse to the Sub-Saharan African region, in spite of its strong post-colonial ties with European donors, because trade linkages play actually a greater role than political ties. A consequence of the major role played by trade linkages is that the bilateralism effect is not necessarily adverse to aid selectivity, given that major trading partners are also on average open and relatively well performing economies.

Suggested Citation

  • Jean-Claude Berthélemy, 2004. "Bilateralism and multilateralism in official development assistance policies," Cahiers de la Maison des Sciences Economiques bla04104, Université Panthéon-Sorbonne (Paris 1).
    • Handle: RePEc:mse:wpsorb:bla04104
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    File URL: ftp://mse.univ-paris1.fr/pub/mse/cahiers2004/Bla04104.pdf
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    References listed on IDEAS

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    1. Lahiri, Sajal & Raimondos-Moller, Pascalis, 2000. "Lobbying by Ethnic Groups and Aid Allocation," Economic Journal, Royal Economic Society, vol. 110(462), pages 62-79, March.
    2. 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.
    3. Dudley, Leonard & Montmarquette, Claude, 1976. "A Model of the Supply of Bilateral Foreign Aid," American Economic Review, American Economic Association, vol. 66(1), pages 132-142, March.
    4. Finn Tarp & Christian F. Bach & Henrik Hansen & Søren Baunsgaard, 1998. "Danish Aid Policy: Theory and Empirical Evidence," Discussion Papers 98-06, University of Copenhagen. Department of Economics.
    5. Easterly, william, 2001. "Growth implosions, debt explosions, and my Aunt Marilyn : do growth slowdowns cause public debt crises?," Policy Research Working Paper Series 2531, The World Bank.
    6. Maizels, Alfred & Nissanke, Machiko K., 1984. "Motivations for aid to developing countries," World Development, Elsevier, vol. 12(9), pages 879-900, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    International aid allocation.;

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models

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