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International Development Aid Allocation Determinants

Author

Listed:
  • Tapas Mishra

    (Department of Economics, Swansea University, UK)

  • Bazoumana Ouattara

    (Department of Economics, Swansea University, UK)

  • Mamata Parhi

    (WISERD and Department of Economics, Swansea University, UK)

Abstract

This paper investigates the factors explaining aid allocation by bilateral and multilateral donors. We use data for 146 aid recipient countries over the period 1990-2007 and employ Bayesian Averaging of Classical Estimates Approach (BACE) approach and find that both the recipient need and donor interest motives are `significant' determinants of bilateral and multilateral aid allocation process. Our results also indicate that the measures for recipient need and donor interests vary from bilateral to multilateral donors. For example, with respect to the recipient need, we find that while income per capita matters in the allocation of multilateral aid, for bilateral donors the size of population, as an indicator of recipient need, is a key element in the allocation process. Similar findings also hold for democracy/governance indicators.

Suggested Citation

  • Tapas Mishra & Bazoumana Ouattara & Mamata Parhi, 2012. "International Development Aid Allocation Determinants," Economics Bulletin, AccessEcon, vol. 32(2), pages 1385-1403.
    • Handle: RePEc:ebl:ecbull:eb-11-00879
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    File URL: http://www.accessecon.com/Pubs/EB/2012/Volume32/EB-12-V32-I2-P133.pdf
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    References listed on IDEAS

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    1. 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.
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    5. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, vol. 64(2), pages 547-570, April.
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    Cited by:

    1. Carrie B Dolan & Kaci Kennedy McDade, 2020. "Pulling the purse strings: Are there sectoral differences in political preferencing of Chinese aid to Africa?," PLOS ONE, Public Library of Science, vol. 15(4), pages 1-18, April.

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    More about this item

    Keywords

    Aid allocation; Bayesian Averaging of Classical Estimates; Determinants of bilateral and multilateral aid; Developing economies;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics

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