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Inertia and Herding in Humanitarian Aid Decisions

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  • David Fielding

    () (Department of Economics, University of Otago)

Abstract

Using panel data for the period 1995-2008, we model the aid allocation decisions of the three largest official donors of humanitarian aid: the United States government, the United Kingdom government and the European Commission. We find evidence that donor decisions depend on both the recipientÕs need and the donorÕs economic interest, but with marked asymmetries in the relative importance of different factors across the three donors. Moreover, some donors exhibit much more inertia than others in responding to new areas of need, and some are much more influenced by the decisions of other donors. Despite being a relatively small donor, the United Kingdom is particularly influential.

Suggested Citation

  • David Fielding, 2010. "Inertia and Herding in Humanitarian Aid Decisions," Working Papers 1009, University of Otago, Department of Economics, revised Aug 2010.
  • Handle: RePEc:otg:wpaper:1009
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    File URL: http://www.otago.ac.nz/economics/research/otago077136.pdf
    File Function: First version, 2010
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    References listed on IDEAS

    as
    1. Canavire-Bacarreza, Gustavo & Nunnenkamp, Peter & Thiele, Rainer & Triveño, Luis, 2005. "Assessing the allocation of aid: Developmental concerns and the self-interest of donors," Kiel Working Papers 1253, Kiel Institute for the World Economy (IfW).
    2. Robert K. Fleck & Christopher Kilby, 2006. "How Do Political Changes Influence US Bilateral Aid Allocations? Evidence from Panel Data," Review of Development Economics, Wiley Blackwell, vol. 10(2), pages 210-223, May.
    3. 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.
    4. Berthelemy, Jean-Claude & Tichit, Ariane, 2004. "Bilateral donors' aid allocation decisions--a three-dimensional panel analysis," International Review of Economics & Finance, Elsevier, vol. 13(3), pages 253-274.
    5. Eric Neumayer, 2005. "Is the Allocation of Food Aid Free from Donor Interest Bias?," Journal of Development Studies, Taylor & Francis Journals, vol. 41(3), pages 394-411.
    6. Jean-Claude Berthélemy, 2006. "Bilateral Donors' Interest vs. Recipients' Development Motives in Aid Allocation: Do All Donors Behave the Same?," Review of Development Economics, Wiley Blackwell, vol. 10(2), pages 179-194, May.
    7. Fleck, Robert K. & Kilby, Christopher, 2010. "Changing aid regimes? U.S. foreign aid from the Cold War to the War on Terror," Journal of Development Economics, Elsevier, vol. 91(2), pages 185-197, March.
    8. Anastasia Semykina & Jeffrey M. Wooldridge, 2013. "Estimation of dynamic panel data models with sample selection," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 28(1), pages 47-61, January.
    9. McGillivray, Mark & Oczkowski, Edward, 1991. "Modelling the Allocation of Australian Bilateral Aid: A Two-Part Sample Selection Approach," The Economic Record, The Economic Society of Australia, vol. 67(197), pages 147-152, June.
    10. Guilkey, David K. & Murphy, James L., 1993. "Estimation and testing in the random effects probit model," Journal of Econometrics, Elsevier, vol. 59(3), pages 301-317, October.
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    12. Simon Feeny & Matthew Clarke, 2007. "What Determines Australia's Response to Emergencies and Natural Disasters?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 40(1), pages 24-36, March.
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    Cited by:

    1. Mohamed Mounir Sraieb, 2015. "An Empirical Model for U.S. Foreign Aid Allocation," Working Papers ECARES ECARES 2015-48, ULB -- Universite Libre de Bruxelles.
    2. Abrams M E Tagem, 2017. "Analysing the determinants of health aid allocation in sub-Saharan Africa," Discussion Papers 2017-09, University of Nottingham, CREDIT.

    More about this item

    Keywords

    Humanitarian aid; Dynamic panel model;

    JEL classification:

    • H59 - Public Economics - - National Government Expenditures and Related Policies - - - Other
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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