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Aid Allocation through Various Official and Private Channels: Need, Merit and Self-Interest as Motives of German Donors

  • Nunnenkamp, Peter
  • Öhler, Hannes

Previous literature largely ignores the heterogeneity of aid channels used by each single donor country. We estimate Tobit models to assess the relative importance of recipient need, recipient merit and self-interest of donors for various channels of official and private German aid across a large sample of recipient countries in 2005-2007. Our findings strongly underscore the need for a disaggregated analysis of aid allocation. Aid channels differ significantly in the extent to which need and merit are taken into account. Yet, the German case does not reveal unambiguously superior aid channels. Better targeted aid through some channels seems to be conditioned on political support by recipient countries in the UN General Assembly.

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Paper provided by Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Hannover 2010 with number 15.

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Date of creation: 2010
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Handle: RePEc:zbw:gdec10:15
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  1. 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).
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  5. Rainer Thiele & Peter Nunnenkamp & Axel Dreher, 2007. "Do Donors Target Aid in Line with the Millennium Development Goals? A Sector Perspective of Aid Allocation," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 143(4), pages 596-630, December.
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  7. Axel Dreher & Peter Nunnenkamp & Susann Thiel & Rainer Thiele, 2010. "Aid Allocation by German NGOs: Does the Degree of Public Refinancing Matter?," Kiel Working Papers 1584, Kiel Institute for the World Economy.
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  13. Koch, Dirk-Jan & Dreher, Axel & Nunnenkamp, Peter & Thiele, Rainer, 2009. "Keeping a Low Profile: What Determines the Allocation of Aid by Non-Governmental Organizations?," World Development, Elsevier, vol. 37(5), pages 902-918, May.
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  20. Anke Hoeffler & Verity Outram, 2008. "Need, Merit or Self-Interest - What Determines the Allocation of Aid?," CSAE Working Paper Series 2008-19, Centre for the Study of African Economies, University of Oxford.
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  22. Collier, Paul & Hoeffler, Anke, 2002. "Aid, policy, and growth in post-conflict societies," Policy Research Working Paper Series 2902, The World Bank.
  23. Baulch, Bob, 2006. "Aid distribution and the MDGs," World Development, Elsevier, vol. 34(6), pages 933-950, June.
  24. Axel Dreher & Florian Mölders & Peter Nunnenkamp, 2010. "Aid Delivery through Non-governmental Organisations: Does the Aid Channel Matter for the Targeting of Swedish Aid?," The World Economy, Wiley Blackwell, vol. 33(2), pages 147-176, 02.
  25. SAWADA Yasuyuki & YAMADA Hiroyuki & KUROSAKI Takashi, 2008. "Is Aid Allocation Consistent with Global Poverty Reduction?: A Cross-Donor Comparison," Discussion papers 08025, Research Institute of Economy, Trade and Industry (RIETI).
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