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Aid Financing of Global Public Goods: an Update

  • Cepparulo, Alessandra
  • Giuriato, Luisa

The paper compares different aggregates of aid financed global public goods and detects the presence, for the period 1995-2006, of the substitution effect between these aggregates and traditional aid that was found by former studies for earlier periods. A second focus of the paper is on the differences in the importance that donors attach to the various types of global public goods, trying to detect regular patterns in their choices of financing. Statistical regularities, representative of common historical, social, cultural factors, for groups of countries (Anglo-Saxon, Northern European and Central European) give rise to the existence of a certain clusterized homogeneity in global public goods financing. Potential explanatory variables are examined in a panel analysis, which reveals the dominance of the donors’ wealth, preferences for public goods and public finance constraints in the decision of aid funding of global public goods. Finally, there is evidence that some global public goods with weakest-link technologies have become increasingly important at the global level. The increase in their financing through aid flows could be explained by the rich countries’ fear of an insufficient provision by poor countries, which, increasingly, cannot afford to pay for them: rich countries are therefore stepping in to avoid sub-optimal levels of provision, as already foreseen by Sandler (1998).

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 22625.

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Date of creation: Dec 2009
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Handle: RePEc:pra:mprapa:22625
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  1. David Roodman, 2004. "An Index of Donor Performance," Development and Comp Systems 0412004, EconWPA.
  2. Sandler, Todd, 1998. "Global and Regional Public Goods: A Prognosis for Collective Action," Staff General Research Papers 1225, Iowa State University, Department of Economics.
  3. Burnell, Peter, 2004. "Foreign Aid Resurgent: New Spirit or Old Hangover?," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  4. Jayaraman, Rajshri & Kanbur, Ravi, 1999. "International Public Goods and the Case for Foreign Aid," Working Papers 127684, Cornell University, Department of Applied Economics and Management.
  5. Michael Clemens & Todd Moss, 2005. "Ghost of 0.7%: Origins and Relevance of the International Aid Target," Working Papers 68, Center for Global Development.
  6. Magnus Lodefalk & John Whalley, 2002. "Reviewing Proposals for a World Environmental Organisation," The World Economy, Wiley Blackwell, vol. 25(5), pages 601-617, 05.
  7. Peter Hjertholm & Howard White, 2000. "Survey of Foreign Aid: History, Trends and Allocation," Discussion Papers 00-04, University of Copenhagen. Department of Economics.
  8. 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).
  9. Dollar, David & Alesina, Alberto, 2000. "Who Gives Foreign Aid to Whom and Why?," Scholarly Articles 4553020, Harvard University Department of Economics.
  10. Helmut Reisen & Marcelo Soto & Thomas Weithöner, 2004. "Financing Global and Regional Public Goods Through ODA: Analysis and Evidence from the OECD Creditor Reporting System," OECD Development Centre Working Papers 232, OECD Publishing.
  11. Anand, P.B., 2002. "Financing the Provision of Global Public Goods," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  12. Canavire-Bacarreza, Gustavo & Nunnenkamp, Peter & Thiele, Rainer & Triveño, Luis, 2006. "Assessing the allocation of aid : developmental concerns and the self-interest of donors," Open Access Publications from Kiel Institute for the World Economy 3983, Kiel Institute for the World Economy (IfW).
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