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

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  • Koch, Dirk-Jan
  • Dreher, Axel
  • Nunnenkamp, Peter
  • Thiele, Rainer

Abstract

Summary We analyze the targeting of non-governmental organization (NGO) aid across countries in a multivariate regression framework, based on a dataset for 61 important international NGOs. 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 difficult institutional environments. Rather, they replicate 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. Our findings suggest that NGOs keep a low profile rather than distinguishing themselves from other donors. It remains open to debate, however, whether these findings also apply to the wide variety of smaller NGOs (not covered by our sample).

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  • 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.
    • Handle: RePEc:eee:wdevel:v:37:y:2009:i:5:p:902-918
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    3. Nicola Banks & David Hulme, 2012. "The role of NGOs and civil society in development and poverty reduction," Global Development Institute Working Paper Series 17112, GDI, The University of Manchester.
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    7. Mersland, Roy & Nyarko, Samuel Anokye & Sirisena, Amila Buddhika, 2020. "A hybrid approach to international market selection: The case of impact investing organizations," International Business Review, Elsevier, vol. 29(1).
    8. 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.
    9. Shin, Wonkyu & Kim, Youngwan & Sohn, Hyuk-Sang, 2017. "Do Different Implementing Partnerships Lead to Different Project Outcomes? Evidence from the World Bank Project-Level Evaluation Data," World Development, Elsevier, vol. 95(C), pages 268-284.
    10. Banks, Nicola & Hulme, David & Edwards, Michael, 2015. "NGOs, States, and Donors Revisited: Still Too Close for Comfort?," World Development, Elsevier, vol. 66(C), pages 707-718.
    11. 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.
    12. Tierney, Michael J. & Nielson, Daniel L. & Hawkins, Darren G. & Roberts, J. Timmons & Findley, Michael G. & Powers, Ryan M. & Parks, Bradley & Wilson, Sven E. & Hicks, Robert L., 2011. "More Dollars than Sense: Refining Our Knowledge of Development Finance Using AidData," World Development, Elsevier, vol. 39(11), pages 1891-1906.
    13. Dipendra, K.C., 2020. "Which aid targets poor at the sub-national level?," World Development Perspectives, Elsevier, vol. 17(C).
    14. 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.
    15. Nunnenkamp, Peter & Öhler, Hannes & Schwörer, Tillmann, 2013. "US based NGOs in International Development: Financial and Economic Determinants of Survival," World Development, Elsevier, vol. 46(C), pages 45-65.
    16. Heyes, Anthony & Martin, Steve, 2015. "NGO mission design," Journal of Economic Behavior & Organization, Elsevier, vol. 119(C), pages 197-210.
    17. Afridi, Muhammad Asim & Ventelou, Bruno, 2013. "Impact of health aid in developing countries: The public vs. the private channels," Economic Modelling, Elsevier, vol. 31(C), pages 759-765.
    18. Maiden, Emily & Brockway, Mark, 2018. "Parlez-vous français? Language and agricultural aid allocation strategies in northern Mali," World Development, Elsevier, vol. 106(C), pages 356-375.
    19. Mersland, Roy & D’Espallier, Bert & Supphellen, Magne, 2013. "The Effects of Religion on Development Efforts: Evidence from the Microfinance Industry and a Research Agenda," World Development, Elsevier, vol. 41(C), pages 145-156.
    20. Ronald B. Davies & Stephan Klasen, 2019. "Darlings and Orphans: Interactions across Donors in International Aid," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(1), pages 243-277, January.

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    Keywords

    aid allocation aid agencies non-governmental organizations poverty;

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid

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