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Aid Financing of Global Public Goods: an Update

Author

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  • Cepparulo, Alessandra
  • Giuriato, Luisa

Abstract

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).

Suggested Citation

  • Cepparulo, Alessandra & Giuriato, Luisa, 2009. "Aid Financing of Global Public Goods: an Update," MPRA Paper 22625, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:22625
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    File URL: https://mpra.ub.uni-muenchen.de/22625/1/MPRA_paper_22625.pdf
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    References listed on IDEAS

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    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. P. B. Anand, 2004. "Financing the Provision of Global Public Goods," The World Economy, Wiley Blackwell, vol. 27(2), pages 215-237, February.
    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. Cepparulo, Alessandra & Giuriato, Luisa, 2009. "Aid Financing of Global Public Goods: an Update," MPRA Paper 22625, University Library of Munich, Germany.
    5. Peter Hjertholm & Howard White, 2000. "Survey of Foreign Aid: History, Trends and Allocation," Discussion Papers 00-04, University of Copenhagen. Department of Economics.
    6. David Roodman, 2004. "An Index of Donor Performance," Working Papers 42, Center for Global Development.
    7. Todd Sandler, 1998. "Global and regional public goods: a prognosis for collective action," Fiscal Studies, Institute for Fiscal Studies, vol. 19(3), pages 221-247, August.
    8. Michael Clemens & Todd Moss, 2005. "Ghost of 0.7%: Origins and Relevance of the International Aid Target," Development and Comp Systems 0509006, University Library of Munich, Germany.
    9. 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.
    10. 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.
    11. Magnus Lodefalk & John Whalley, 2002. "Reviewing Proposals for a World Environmental Organisation," The World Economy, Wiley Blackwell, vol. 25(5), pages 601-617, May.
    12. 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.
    13. Burnell, Peter, 2004. "Foreign Aid Resurgent: New Spirit or Old Hangover?," WIDER Working Paper Series 044, World Institute for Development Economic Research (UNU-WIDER).
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    Citations

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    Cited by:

    1. Gravier-Rymaszewska, Joanna, 2012. "How Aid Supply Responds to Economic Crises: A Panel VAR Approach," WIDER Working Paper Series 025, World Institute for Development Economic Research (UNU-WIDER).
    2. Cepparulo, Alessandra & Giuriato, Luisa, 2009. "Aid Financing of Global Public Goods: an Update," MPRA Paper 22625, University Library of Munich, Germany.
    3. Alessandra Cepparulo & Luisa Giuriato, 2012. "Global Challenges and Country-Specific Responses through Aid Financing of Global Public Goods," Working Papers 156, University of Rome La Sapienza, Department of Public Economics.
    4. repec:unu:wpaper:wp2012-25 is not listed on IDEAS

    More about this item

    Keywords

    Foreign aid; Global public goods;

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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