IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v38y2010i3p228-243.html
   My bibliography  Save this article

Is Corporate Aid Targeted to Poor and Deserving Countries? A Case Study of Nestlé's Aid Allocation

Author

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

Abstract

Summary Empirical evidence on the targeting of private aid is largely lacking, even though corporate donors are an increasingly important source of aid. We contribute to closing this gap by performing a case study of Nestlé. The allocation of Nestlé's aid is compared to that of Swiss ODA and NGO aid, testing for both altruistic and selfish aid motivations. We conclude that 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. Moreover, according to our Tobit estimations, Nestlé grants more aid to recipient countries with stronger democratic but also more corrupt institutions.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:wdevel:v:38:y:2010:i:3:p:228-243
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305-750X(09)00169-7
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Axel Dreher & Florian Moelders & Peter Nunnenkamp, 2007. "Are NGOs the Better Donors? A Case Study of Aid Allocation for Sweden," KOF Working papers 07-180, KOF Swiss Economic Institute, ETH Zurich.
    2. Canavire-Bacarreza, Gustavo & Nunnenkamp, Peter & Thiele, Rainer & Triveño, Luis, 2005. "Assessing the allocation of aid: Developmental concerns and the self-interest of donors," Kiel Working Papers 1253, Kiel Institute for the World Economy (IfW Kiel).
    3. Ashman, Darcy, 2001. "Civil Society Collaboration with Business: Bringing Empowerment Back in," World Development, Elsevier, vol. 29(7), pages 1097-1113, July.
    4. Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2008. "Does US aid buy UN general assembly votes? A disaggregated analysis," Public Choice, Springer, vol. 136(1), pages 139-164, July.
    5. 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.
    6. Alberto Alesina & Beatrice Weder, 2002. "Do Corrupt Governments Receive Less Foreign Aid?," American Economic Review, American Economic Association, vol. 92(4), pages 1126-1137, September.
    7. 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.
    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. Kolk, Ans & van Tulder, Rob, 2006. "Poverty alleviation as business strategy? Evaluating commitments of frontrunner Multinational Corporations," World Development, Elsevier, vol. 34(5), pages 789-801, May.
    10. Collier, Paul & Dollar, David, 2001. "Can the World Cut Poverty in Half? How Policy Reform and Effective Aid Can Meet International Development Goals," World Development, Elsevier, vol. 29(11), pages 1787-1802, November.
    11. Jean‐Claude Berthélemy, 2006. "Bilateral Donors’ Interest vs. Recipients’ Development Motives in Aid Allocation: Do All Donors Behave the Same?," Review of Development Economics, Wiley Blackwell, vol. 10(2), pages 179-194, May.
    12. Anke Hoeffler & Scott Gates, 2004. "Global Aid Allocation: Are Nordic Donors Different?," Economics Series Working Papers WPS/2004-34, University of Oxford, Department of Economics.
    13. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
    14. Scott Gates & Anke Hoeffler, 2004. "Global Aid Allocation: Are Nordic Donors Different?," CSAE Working Paper Series 2004-34, Centre for the Study of African Economies, University of Oxford.
    15. Kolk, Ans & van Tulder, Rob & Kostwinder, Esther, 2008. "Business and partnerships for development," European Management Journal, Elsevier, vol. 26(4), pages 262-273, August.
    16. Edwards, Michael & Hulme, David, 1996. "Too close for comfort? the impact of official aid on nongovernmental organizations," World Development, Elsevier, vol. 24(6), pages 961-973, June.
    17. Dollar, David & Levin, Victoria, 2006. "The Increasing Selectivity of Foreign Aid, 1984-2003," World Development, Elsevier, vol. 34(12), pages 2034-2046, December.
    18. Michael A. Clemens & Steven Radelet & Rikhil Bhavnani, 2004. "Counting chickens when they hatch: The short-term effect of aid on growth," International Finance 0407010, University Library of Munich, Germany.
    19. Gilles Nancy & Boriana Yontcheva, 2006. "Does NGO Aid Go to the Poor? Empirical Evidence from Europe," IMF Working Papers 2006/039, International Monetary Fund.
    20. Rainer Thiele & Peter Nunnenkamp & Axel Dreher, 2007. "Do Donors Target Aid in Line with the Millennium Development Goals? A Sector Perspective of Aid Allocation," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(4), pages 596-630, December.
    21. Peter Nunnenkamp & Rainer Thiele, 2006. "Targeting Aid to the Needy and Deserving: Nothing But Promises?," The World Economy, Wiley Blackwell, vol. 29(9), pages 1177-1201, September.
    22. Oecd, 2004. "Aid Effectiveness and Selectivity: Integrating Multiple Objectives into Aid Allocations," OECD Journal on Development, OECD Publishing, vol. 4(3), pages 7-40.
    23. World Bank, 2006. "Beyond Corporate Social Responsibility : The Scope for Corporate Investment in Community Driven Development," World Bank Publications - Reports 8240, The World Bank Group.
    24. Samii, Ramina & Van Wassenhove, Luk N. & Bhattacharya, Shantanu, 2002. "An Innovative Public-Private Partnership: New Approach to Development," World Development, Elsevier, vol. 30(6), pages 991-1008, June.
    25. 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.
    26. Mark McGillivray, 2003. "Aid Effectiveness and Selectivity: Integrating Multiple Objectives into Aid Allocations," WIDER Working Paper Series DP2003-71, World Institute for Development Economic Research (UNU-WIDER).
    27. Collier, Paul & Dollar, David, 2002. "Aid allocation and poverty reduction," European Economic Review, Elsevier, vol. 46(8), pages 1475-1500, September.
    28. Hristos Doucouliagos & Martin Paldam, 2007. "A meta-analysis of development aid allocation: The effects of income level and population size," Economics Working Papers 2007-15, Department of Economics and Business Economics, Aarhus University.
    29. Burnside, Craig & Dollar, David, 2004. "Aid, policies, and growth : revisiting the evidence," Policy Research Working Paper Series 3251, The World Bank.
    30. Chataway, Joanna & Smith, James, 2006. "The International AIDS Vaccine Initiative (IAVI): Is It Getting New Science and Technology to the World's Neglected Majority?," World Development, Elsevier, vol. 34(1), pages 16-30, January.
    31. Ilyana Kuziemko & Eric Werker, 2006. "How Much Is a Seat on the Security Council Worth? Foreign Aid and Bribery at the United Nations," Journal of Political Economy, University of Chicago Press, vol. 114(5), pages 905-930, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dirk-Jan Koch, 2022. "Do transactions to tax havens and corruption attract officially supported export credit? Evidence from three European export credit agencies," SN Business & Economics, Springer, vol. 2(6), pages 1-21, June.
    2. Cyrlene Claasen & Julia Roloff, 2012. "The Link Between Responsibility and Legitimacy: The Case of De Beers in Namibia," Journal of Business Ethics, Springer, vol. 107(3), pages 379-398, May.
    3. 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).
    4. Hermano, Víctor & Martín-Cruz, Natalia, 2013. "How to Deliver Foreign Aid? The Case of Projects Governed by the Spanish International Agency," World Development, Elsevier, vol. 43(C), pages 298-314.
    5. Andreas Fuchs & Hannes Öhler, 2021. "Does private aid follow the flag? An empirical analysis of humanitarian assistance," The World Economy, Wiley Blackwell, vol. 44(3), pages 671-705, March.
    6. Blanca de-Miguel-Molina & Vicente Chirivella-González & Beatriz García-Ortega, 2016. "Corporate philanthropy and community involvement. Analysing companies from France, Germany, the Netherlands and Spain," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(6), pages 2741-2766, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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).
    2. 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.
    3. Axel Dreher & Florian Moelders & Peter Nunnenkamp, 2007. "Are NGOs the Better Donors? A Case Study of Aid Allocation for Sweden," KOF Working papers 07-180, KOF Swiss Economic Institute, ETH Zurich.
    4. 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.
    5. Rainer Thiele & Peter Nunnenkamp & Axel Dreher, 2007. "Do Donors Target Aid in Line with the Millennium Development Goals? A Sector Perspective of Aid Allocation," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(4), pages 596-630, December.
    6. Nunnenkamp, Peter & Öhler, Hannes, 2011. "Aid Allocation through Various Official and Private Channels: Need, Merit, and Self-Interest as Motives of German Donors," World Development, Elsevier, vol. 39(3), pages 308-323, March.
    7. Peter Nunnenkamp & Rainer Thiele, 2009. "Sind Nichtregierungsorganisationen die besseren Entwicklungshelfer?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 10(3), pages 266-289, August.
    8. 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.
    9. John‐Michael Davis & Liam Swiss, 2020. "Need, Merit, Self‐Interest or Convenience? Exploring Aid Allocation Motives of Grassroots International NGOs," Journal of International Development, John Wiley & Sons, Ltd., vol. 32(8), pages 1324-1345, November.
    10. Axel Dreher & Florian Mölders & Peter Nunnenkamp, 2010. "Aid Delivery through Non‐governmental Organisations: Does the Aid Channel Matter for the Targeting of Swedish Aid?," The World Economy, Wiley Blackwell, vol. 33(2), pages 147-176, February.
    11. Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2008. "Does US aid buy UN general assembly votes? A disaggregated analysis," Public Choice, Springer, vol. 136(1), pages 139-164, July.
    12. 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.
    13. Jacky Amprou & Patrick Guillaumont & Sylviane Guillaumont Jeanneney, 2007. "Aid Selectivity According to Augmented Criteria," The World Economy, Wiley Blackwell, vol. 30(5), pages 733-763, May.
    14. Felicitas Nowak-Lehmann D. & Inmaculada Martínez-Zarzoso & Dierk Herzer & Stephan Klasen & Axel Dreher, 2009. "In Search for a Long-run Relationship between Aid and Growth: Pitfalls and Findings," Ibero America Institute for Econ. Research (IAI) Discussion Papers 196, Ibero-America Institute for Economic Research.
    15. 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.
    16. Clist, Paul, 2011. "25Years of Aid Allocation Practice: Whither Selectivity?," World Development, Elsevier, vol. 39(10), pages 1724-1734.
    17. Stijn Claessens & Danny Cassimon, 2007. "Empirical evidence on the new international aid architecture," WEF Working Papers 0026, ESRC World Economy and Finance Research Programme, Birkbeck, University of London.
    18. Okullo, Samuel J. & Reynès, Frédéric, 2011. "Can reserve additions in mature crude oil provinces attenuate peak oil?," Energy, Elsevier, vol. 36(9), pages 5755-5764.
    19. Suzuki, Mao, 2020. "Profits before patients? Analyzing donors’ economic motives for foreign aid in the health sector," World Development, Elsevier, vol. 132(C).
    20. Canavire-Bacarreza, Gustavo & Nunnenkamp, Peter & Thiele, Rainer & Triveño, Luis, 2005. "Assessing the allocation of aid: Developmental concerns and the self-interest of donors," Kiel Working Papers 1253, Kiel Institute for the World Economy (IfW Kiel).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:38:y:2010:i:3:p:228-243. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.