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Inertia and Herding in Humanitarian Aid Decisions

  • David Fielding


    (Department of Economics, University of Otago)

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.

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Paper provided by University of Otago, Department of Economics in its series Working Papers with number 1009.

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Length: 32 pages
Date of creation: Aug 2010
Date of revision: Aug 2010
Handle: RePEc:otg:wpaper:1009
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  1. Jean-Claude Berthelemy, 2005. "Bilateral donors' interest vs. recipients' development motives in aid allocation : do all donors behave the same ?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00193273, HAL.
  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, 05.
  3. Eric Neumayer, 2005. "Is the allocation of food aid free from donor interest bias?," LSE Research Online Documents on Economics 16689, London School of Economics and Political Science, LSE Library.
  4. Dollar, David & Alesina, Alberto, 2000. "Who Gives Foreign Aid to Whom and Why?," Scholarly Articles 4553020, Harvard University Department of Economics.
  5. Semykina, Anastasia & Wooldridge, Jeffrey M., 2010. "Estimating panel data models in the presence of endogeneity and selection," Journal of Econometrics, Elsevier, vol. 157(2), pages 375-380, August.
  6. Berthelemy, Jean-Claude & Tichit, Ariane, 2002. "Bilateral Donors' Aid Allocation Decisions: A Three-dimensional Panel Analysis," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  7. Robert K. Fleck & Christopher Kilby, 2009. "Changing Aid Regimes? U.S. Foreign Aid from the Cold War to the War on Terror," Villanova School of Business Department of Economics and Statistics Working Paper Series 1, Villanova School of Business Department of Economics and Statistics.
  8. 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, 03.
  9. 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, 01.
  10. 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 147-52, June.
  11. 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.
  12. 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.
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