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Are NGOs the better donors? A case study of aid allocation for Sweden

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  • Dreher, Axel
  • Mölders, Florian
  • Nunnenkamp, Peter

Abstract

This paper analyzes whether and to what extent non-governmental organizations (NGOs) outperform official donors by allocating aid in a way that renders effective poverty alleviation more likely. We employ Probit and Tobit models and make use of an exceptionally detailed database that allows an assessment of the allocation of Swedish NGO aid in comparison to the allocation of Swedish official aid. Our results show that NGOs are more selective when deciding about which countries to enter at all. Moreover, in contrast to NGO aid, there is some evidence that political and commercial motives matter for the selection of ODA recipients. However, the Swedish case also supports the skeptical view according to which NGOs are unlikely to outperform official donors by providing better targeted aid when it comes to the allocation across recipients having passed the eligibility test.

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  • Dreher, Axel & Mölders, Florian & Nunnenkamp, Peter, 2007. "Are NGOs the better donors? A case study of aid allocation for Sweden," Kiel Working Papers 1383, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1383
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    Cited by:

    1. Axel Dreher & Peter Nunnenkamp & Hannes Öhler & Johannes Weisser, 2009. "Acting Autonomously or Mimicking the State and Peers? A Panel Tobit Analysis of Financial Dependence and Aid Allocation by Swiss NGOs," CESifo Working Paper Series 2617, CESifo.
    2. Dirk-Jan Koch & Ruerd Ruben, 2008. "Spatial Clustering Of NGOs: An Evolutionary Economic Geography Approach," Papers in Evolutionary Economic Geography (PEEG) 0814, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2008.
    3. 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.
    4. Spiros Bougheas & Alessia Isopi & Trudy Owens, 2022. "NGO's and Donors' Funding: Evidence from Uganda," CESifo Working Paper Series 10055, CESifo.
    5. Metzger, Laura & Nunnenkamp, Peter & Mahmoud, Toman Omar, 2010. "Is Corporate Aid Targeted to Poor and Deserving Countries? A Case Study of Nestlé's Aid Allocation," World Development, Elsevier, vol. 38(3), pages 228-243, March.
    6. World Bank & International Monetary Fund, 2010. "Global Monitoring Report 2010 : The MDGs after the Crisis," World Bank Publications - Books, The World Bank Group, number 2444, December.
    7. Raschky, Paul A. & Schwindt, Manijeh, 2012. "On the channel and type of aid: The case of international disaster assistance," European Journal of Political Economy, Elsevier, vol. 28(1), pages 119-131.
    8. Nunnenkamp, Peter & Weingarth, Janina & Weisser, Johannes, 2009. "Is NGO aid not so different after all? Comparing the allocation of Swiss aid by private and official donors," European Journal of Political Economy, Elsevier, vol. 25(4), pages 422-438, December.
    9. Bjørnskov, Christian, 2010. "Do elites benefit from democracy and foreign aid in developing countries?," Journal of Development Economics, Elsevier, vol. 92(2), pages 115-124, July.
    10. Spiros Bougheas & Alessia Isopi & Trudy Owens, 2012. "How do Donors Allocate Funds to NGOs? Evidence from Uganda," Discussion Papers 12/08, University of Nottingham, CREDIT.
    11. Malki, Elli, 2008. "Put your money where your mouth is," MPRA Paper 12388, University Library of Munich, Germany.
    12. Metzger, Laura & Nunnenkamp, Peter & Omar Mahmoud, Toman, 2008. "Does corporate aid really help fighting worldwide poverty? A case study of Nestlé's aid allocation," Kiel Working Papers 1414, Kiel Institute for the World Economy (IfW Kiel).

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    More about this item

    Keywords

    NGO aid; ODA; Sector-specific aid; Aid allocation;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • F35 - International Economics - - International Finance - - - Foreign Aid

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