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Global Challenges and Country-Specific Responses through Aid Financing of Global Public Goods

  • Alessandra Cepparulo
  • Luisa Giuriato

In this paper we revisit the impact of global public goods (GPGs) in Official Development Assistance budgets using panel data covering the DAC countries during the period 1973-2009. Our findings reveal a weak crowding-out effect of traditional aid and an increasing financing to weakest-link technology GPGs by rich countries aiming at avoiding sub-optimal levels of provision in strategic sectors. Searching for the determinants of GPG-related aid, we find a significant role played by variables expressing donors’ public finance constraints, openness to the rest of the world and preferences for domestic expenditures.

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Paper provided by University of Rome La Sapienza, Department of Public Economics in its series Working Papers with number 156.

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Length: 33
Date of creation: Nov 2012
Date of revision:
Handle: RePEc:sap:wpaper:wp156
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  1. Kanbur, Ravi & Sandler, Todd & Morrison, Kevin, 1999. "The Future of Development Assistance: Common Pools and International Public Goods," Staff General Research Papers 1629, Iowa State University, Department of Economics.
  2. Lei, Vivian & Tucker, Steven & Vesely, Filip, 2007. "Foreign aid and weakest-link international public goods: An experimental study," European Economic Review, Elsevier, vol. 51(3), pages 599-623, April.
  3. Sandler, Todd, 1998. "Global and Regional Public Goods: A Prognosis for Collective Action," Staff General Research Papers 1225, Iowa State University, Department of Economics.
  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. Kanbur, Ravi, 2001. "Cross-Border Externalities, International Public Goods and Their Implications for Aid Agencies," Working Papers 127364, Cornell University, Department of Applied Economics and Management.
  6. Alberto Alesina & David Dollar, 1998. "Who Gives Foreign Aid to Whom and Why?," NBER Working Papers 6612, National Bureau of Economic Research, Inc.
  7. McGillivray, M. & White, H., 1993. "Explanatory studies of aid allocation among developing countries : a critical survey," ISS Working Papers - General Series 18942, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
  8. Kaul, Inge & Conceicao, Pedro, 2006. "The New Public Finance: Responding to Global Challenges," OUP Catalogue, Oxford University Press, number 9780195179972, March.
  9. P. B. Anand, 2004. "Financing the Provision of Global Public Goods," The World Economy, Wiley Blackwell, vol. 27(2), pages 215-237, 02.
  10. Vicary, Simon & Sandler, Todd, 2002. "Weakest-link public goods: Giving in-kind or transferring money," European Economic Review, Elsevier, vol. 46(8), pages 1501-1520, September.
  11. Scott Gates & Anke Hoeffler, 2004. "Global Aid Allocation: Are Nordic Donors Different?," CSAE Working Paper Series 2004-34, Centre for the Study of African Economies, University of Oxford.
  12. Cepparulo, Alessandra & Giuriato, Luisa, 2009. "Aid Financing of Global Public Goods: an Update," MPRA Paper 22625, University Library of Munich, Germany.
  13. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
  14. Peter Hjertholm & Howard White, 2000. "Survey of Foreign Aid: History, Trends and Allocation," Discussion Papers 00-04, University of Copenhagen. Department of Economics.
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