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Keeping a Low Profile: What Determines the Allocation of Aid by Non-Governmental Organizations?

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Author Info
Dirk-Jan Koch
Axel Dreher
Peter Nunnenkamp
Rainer Thiele

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Abstract

NGOs play an important role in international development cooperation, but the allocation of NGO aid has rarely been mapped, let alone explained. Based on a representative dataset for 61 important NGOs from various OECD countries, we analyze the targeting of NGO aid across a large number of recipient countries by jointly considering major determinants of NGO aid in a multivariate regression framework. While our results show that NGOs are more active in the neediest countries, we reject the hypothesis that NGOs complement official aid through engaging in so-called difficult institutional environments. Rather, they tend to replicate the location choices of official “backdonors.” Moreover, NGOs follow other NGOs so that aid gets clustered. Finally, NGOs select recipient countries with common traits related to religion or colonial history. Taken together, our findings suggest that NGOs keep a low profile rather than distinguishing themselves from other donors and trying to excel under risky conditions

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Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1406.

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Length: 32 pages
Date of creation: Mar 2008
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Handle: RePEc:kie:kieliw:1406

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Related research
Keywords: aid allocation; aid agencies; non-governmental organizations; poverty;

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Find related papers by JEL classification:
F35 - International Economics - - International Finance - - - Foreign Aid

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  1. Peter Nunnenkamp & Rainer Thiele, 2006. "Targeting Aid to the Needy and Deserving: Nothing But Promises?," The World Economy, Blackwell Publishing, vol. 29(9), pages 1177-1201, 09. [Downloadable!] (restricted)
  2. Shaoming Cheng & Roger Stough, 2006. "Location decisions of Japanese new manufacturing plants in China: a discrete-choice analysis," The Annals of Regional Science, Springer, vol. 40(2), pages 369-387, June. [Downloadable!] (restricted)
  3. Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2006. "Does US Aid Buy UN General Assembly Votes? A Disaggregated Analysis," Kiel Working Papers 1275, Kiel Institute for the World Economy. [Downloadable!]
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  4. Neumayer, Eric, 2002. "Is Good Governance Rewarded? A Cross-national Analysis of Debt Forgiveness," World Development, Elsevier, vol. 30(6), pages 913-930, June. [Downloadable!] (restricted)
  5. Gauri, Varun & Galef, Julia, 2005. "NGOs in Bangladesh: Activities, resources, and governance," World Development, Elsevier, vol. 33(12), pages 2045-2065, December. [Downloadable!] (restricted)
  6. David C. Ribar & Mark O. Wilhelm, 2002. "Altruistic and Joy-of-Giving Motivations in Charitable Behavior," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 425-457, April. [Downloadable!] (restricted)
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  7. Axel Dreher & Jan-Egbert Sturm & James Raymond Vreeland, 2007. "Development Aid and International Politics: Does membership on the UN Security Council influence World Bank decisions?," Working papers 07-171, KOF Swiss Economic Institute, ETH Zurich. [Downloadable!]
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  8. McGillivray, Mark, 2003. "Aid Effectiveness and Selectivity: Integrating Multiple Objectives into Aid Allocations," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  9. Robert K. Fleck & Christopher Kilby, 2006. "How Do Political Changes Influence US Bilateral Aid Allocations? Evidence from Panel Data," Review of Development Economics, Blackwell Publishing, vol. 10(2), pages 210-223, 05. [Downloadable!] (restricted)
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  10. Axel Dreher & Florian Mölders & Peter Nunnenkamp, 2007. "Are NGOs the Better Donors? A Case Study of Aid Allocation for Sweden," Kiel Working Papers 1383, Kiel Institute for the World Economy. [Downloadable!]
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  11. Kilby, Christopher, 2005. "Donor Influence in MDBs: the Case of the Asian Development Bank," Vassar College Department of Economics Working Paper Series 70, Vassar College Department of Economics. [Downloadable!]
  12. Collier, Paul & Dollar, David, 2002. "Aid allocation and poverty reduction," European Economic Review, Elsevier, vol. 46(8), pages 1475-1500, September. [Downloadable!] (restricted)
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  13. 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. [Downloadable!] (restricted)
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  14. Gil S. Epstein & Ira N. Gang, 2005. "Contests, NGOs and Decentralizing Aid," IZA Discussion Papers 1711, Institute for the Study of Labor (IZA). [Downloadable!]
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  15. Michael Clemens & Steven Radelet & Rikhil Bhavnani, 2004. "Counting Chickens When They Hatch: The Short-term Effect of Aid on Growth," Working Papers 44, Center for Global Development. [Downloadable!]
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  16. 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. [Downloadable!] (restricted)
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  17. Anna Fruttero & Varun Gauri, 2005. "The Strategic Choices of NGOs: Location Decisions in Rural Bangladesh1," The Journal of Development Studies, Taylor and Francis Journals, vol. 41(5), pages 759-787, July. [Downloadable!] (restricted)
  18. Amin, Sajeda & Rai, Ashok S. & Topa, Giorgio, 2003. "Does microcredit reach the poor and vulnerable? Evidence from northern Bangladesh," Journal of Development Economics, Elsevier, vol. 70(1), pages 59-82, February. [Downloadable!] (restricted)
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