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Does corporate aid really help fighting worldwide poverty? A case study of Nestlé's aid allocation

Author

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  • Metzger, Laura
  • Nunnenkamp, Peter
  • Omar Mahmoud, Toman

Abstract

Having passed the "market test", private aid is claimed by its proponents to be better-targeted than official development assistance (ODA). But empirical evidence is largely lacking. We contribute to closing this gap by performing a case study of Nestlé, one of the frontrunners among multinational corporations being actively involved in the alleviation of poverty. The targeting of Nestlé's aid is compared to that of Swiss ODA and NGO aid, testing for both altruistic and selfish aid motivations. It turns out that Nestlé favored more democratic but also more corrupt recipient countries. Moreover, Nestlé's aid clearly lacks focus in terms of targeting poor countries, which appears to be the downside of the strong link between commercial presence and aid. By contrast, Swiss ODA and NGO aid is more altruistic and poverty-oriented.

Suggested Citation

  • 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).
  • Handle: RePEc:zbw:ifwkwp:1414
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    References listed on IDEAS

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    More about this item

    Keywords

    Private aid; Corporate social responsibility; Official development assistance; NGO aid; Millennium Development Goals; Nestlé; Aid allocation;

    JEL classification:

    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • F35 - International Economics - - International Finance - - - Foreign Aid

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