IDEAS home Printed from https://ideas.repec.org/p/ess/wpaper/id3211.html
   My bibliography  Save this paper

Aid Effort and its Determinants

Author

Listed:
  • Jeffery I. Round
  • Matthew Odedokun

Abstract

The paper empirically explores the factors that could have accounted for the generally declining aid effort (defined as the generosity ratio, or the share of GDP given as aid) of bilateral donors over the last three decades. Annual panel data over 1970-2000 period for the 22 DAC members are used in a series of regressions. The findings suggest the existence of progressivity of aid in relation to donor income. There is also evidence of the economies of scale, in the sense that the share of aid in income decreases with growth in the size of donor country population. Domestic pro-poor tendency also appears to enhance donor generosity, and a positive ‘peer pressure’ effect is also observed. In addition, the extent of military adventurism of the donor is observed to have enhanced aid effort, just as also the size of government. [Discussion Paper No. 2003/03]

Suggested Citation

  • Jeffery I. Round & Matthew Odedokun, 2010. "Aid Effort and its Determinants," Working Papers id:3211, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:3211
    Note: Institutional Papers
    as

    Download full text from publisher

    File URL: http://www.esocialsciences.org/Download/repecDownload.aspx?fname=Document124112010480.5004846.pdf&fcategory=Articles&AId=3211&fref=repec
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lahiri, Sajal & Raimondos-Moller, Pascalis, 2000. "Lobbying by Ethnic Groups and Aid Allocation," Economic Journal, Royal Economic Society, vol. 110(462), pages 62-79, March.
    2. Roubini, Nouriel & Sachs, Jeffrey D., 1989. "Political and economic determinants of budget deficits in the industrial democracies," European Economic Review, Elsevier, vol. 33(5), pages 903-933, May.
    3. 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.
    4. Jakob Svensson, 2000. "Foreign aid and rent-seeking," Springer Books, in: Roger D. Congleton & Kai A. Konrad & Arye L. Hillman (ed.), 40 Years of Research on Rent Seeking 2, pages 165-189, Springer.
    5. Deger, Saadet & Sen, Somnath, 1995. "Military expenditure and developing countries," Handbook of Defense Economics, in: Keith Hartley & Todd Sandler (ed.), Handbook of Defense Economics, edition 1, volume 1, chapter 11, pages 275-307, Elsevier.
    6. Beck, Thorsten & Clarke, George & Groff, Alberto & Keefer, Philip & Walsh, Patrick, 2000. "New tools and new tests in comparative political economy - the database of political institutions," Policy Research Working Paper Series 2283, The World Bank.
    7. Carol Lancaster, 2000. "Transforming Foreign Aid: United States Assistance in the 21st Century," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 321, January.
    8. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    9. Finn Tarp & Christian F. Bach & Henrik Hansen & Søren Baunsgaard, 1998. "Danish Aid Policy: Theory and Empirical Evidence," Discussion Papers 98-06, University of Copenhagen. Department of Economics.
    10. Murshed, S Mansoob & Sen, Somnath, 1995. "Aid Conditionality and Military Expenditure Reduction in Developing Countries: Models of Asymmetric Information," Economic Journal, Royal Economic Society, vol. 105(429), pages 498-509, March.
    11. William Ryrie, 1995. "First World, Third World," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-24205-4, October.
    12. Trumbull, William N & Wall, Howard J, 1994. "Estimating Aid-Allocation Criteria with Panel Data," Economic Journal, Royal Economic Society, vol. 104(425), pages 876-882, July.
    Full references (including those not matched with items on IDEAS)

    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. Jeffery I. Round & Matthew Odedokun, 2003. "Aid Effort and its Determinants," WIDER Working Paper Series DP2003-03, World Institute for Development Economic Research (UNU-WIDER).
    2. Pincin, Jared, 2013. "Political power and aid tying practices in the development assistance committee countries," MPRA Paper 49806, University Library of Munich, Germany.
    3. Stéphane Pallage & Michel A. Robe & Catherine Bérubé, 2006. "The Potential of Foreign Aid as Insurance," IMF Staff Papers, Palgrave Macmillan, vol. 53(3), pages 1-5.
    4. Pincin, Jared, 2012. "Political power and aid tying practices in the development assistance committee countries," MPRA Paper 39463, University Library of Munich, Germany.
    5. Round, Jeffery I. & Odedokun, Matthew, 2004. "Aid effort and its determinants," International Review of Economics & Finance, Elsevier, vol. 13(3), pages 293-309.
    6. Mansoob Murshed, 2002. "Strategic Interaction and Donor Policy Determination in a Domestic Setting," WIDER Working Paper Series DP2002-107, World Institute for Development Economic Research (UNU-WIDER).
    7. Almuth Scholl, 2009. "Aid Effectiveness and Limited Enforceable Conditionality," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(2), pages 377-391, April.
    8. George Mavrotas & Espen Villanger, 2006. "Multilateral Aid Agencies and Strategic Donor Behaviour," WIDER Working Paper Series DP2006-02, World Institute for Development Economic Research (UNU-WIDER).
    9. repec:hum:wpaper:sfb649dp2005-054 is not listed on IDEAS
    10. Mark McGillivray, 2005. "What determines African bilateral aid receipts?," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(8), pages 1003-1018.
    11. Hulya Ulku & Mr. Tito Cordella, 2004. "Grants Versus Loans," IMF Working Papers 2004/161, International Monetary Fund.
    12. Masaki, Takaaki, 2016. "Coups d’État and Foreign Aid," World Development, Elsevier, vol. 79(C), pages 51-68.
    13. Boriana Yontcheva & Mrs. Nadia Masud, 2005. "Does Foreign Aid Reduce Poverty? Empirical Evidence from Nongovernmental and Bilateral Aid," IMF Working Papers 2005/100, International Monetary Fund.
    14. Balázs Szent-Iványi, 2015. "Are Democratising Countries Rewarded with Higher Levels of Foreign Aid?," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 65(4), pages 593-615, December.
    15. Sèna Kimm Gnangnon, 2020. "Trade Openness and Diversification of External Financial Flows for Development: An Empirical Analysis," South Asian Journal of Macroeconomics and Public Finance, , vol. 9(1), pages 22-57, June.
    16. Sanjay Jain, 2007. "Project Assistance versus Budget Support: An Incentive-Theoretic Analysis of Aid Conditionality," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(4), pages 694-719, December.
    17. 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.
    18. Espen Villanger, 2003. "Company influence on foreign aid disbursement: Is conditionality credible when donors have mixed motives?," CMI Working Papers WP 2003:4, CMI (Chr. Michelsen Institute), Bergen, Norway.
    19. Balla, Eliana & Reinhardt, Gina Yannitell, 2008. "Giving and Receiving Foreign Aid: Does Conflict Count?," World Development, Elsevier, vol. 36(12), pages 2566-2585, December.
    20. Fink, Günther & Redaelli, Silvia, 2011. "Determinants of International Emergency Aid--Humanitarian Need Only?," World Development, Elsevier, vol. 39(5), pages 741-757, May.
    21. Montes-Rojas, Gabriel V., 2013. "Can Poor Countries Lobby for More US Bilateral Aid?," World Development, Elsevier, vol. 44(C), pages 77-87.

    More about this item

    Keywords

    determinants of aid efforts; generosity; ODA; DAC; donors; G7;
    All these keywords.

    JEL classification:

    Statistics

    Access and download statistics

    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:ess:wpaper:id:3211. 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: Padma Prakash (email available below). General contact details of provider: http://www.esocialsciences.org .

    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.