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Acting Autonomously or Mimicking the State and Peers? A Panel Tobit Analysis of Financial Dependence and Aid Allocation by Swiss NGOs

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  • Dreher, Axel
  • Nunnenkamp, Peter
  • Öhler, Hannes
  • Weisser, Johannes

Abstract

NGO aid is still widely believed to be superior to official aid (ODA). However, the incentives of NGOs to excel and target aid to the poor and deserving are increasingly disputed. We contribute to the emerging literature on the allocation of NGO aid by performing panel Tobit estimations for Swiss NGOs. The analysis offers new insights in two major regards: First, we cover the allocation of both self-financed and officially co-financed aid for a large panel of NGOs and recipient countries. Second, by classifying each NGO according to its financing structure, we address the unresolved question of whether financial dependence on the government impairs the targeting of NGO aid. It turns out that NGOs mimic the state as well as NGO peers. Officially refinanced NGOs are more inclined to imitate the allocation of ODA. However, the degree of financial dependence does not affect the poverty orientation of NGO aid and the incentives of NGOs to engage in easier environments. The allocation of self-financed aid differs in several respects from the allocation of officially co-financed aid, including the role of financial dependence for imitating the state and herding among NGOs.

Suggested Citation

  • Dreher, Axel & Nunnenkamp, Peter & Öhler, Hannes & Weisser, Johannes, 2009. "Acting Autonomously or Mimicking the State and Peers? A Panel Tobit Analysis of Financial Dependence and Aid Allocation by Swiss NGOs," Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 8, Verein für Socialpolitik, Research Committee Development Economics.
    • Handle: RePEc:zbw:gdec09:8
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    References listed on IDEAS

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    Cited by:

    1. Dreher, Axel & Nunnenkamp, Peter & Thiel, Susann & Thiele, Rainer, 2010. "Aid allocation by German NGOs: Does the degree of public refinancing matter?," University of Göttingen Working Papers in Economics 92, University of Goettingen, Department of Economics.
    2. Peter Nunnenkamp & Rainer Thiele, 2009. "Sind Nichtregierungsorganisationen die besseren Entwicklungshelfer?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 10(3), pages 266-289, August.
    3. Jaromír Harmáček & Miroslav Syrovátka & Zdeněk Opršal, 2017. "Analýza faktorů selekce a alokace české rozvojové pomoci s využitím panelových dat a metod Probit a Tobit [Factors of Czech Aid Selection and Allocation: Panel Probit and Tobit Analysis]," Politická ekonomie, Prague University of Economics and Business, vol. 2017(2), pages 179-197.
    4. Axel Dreher & Peter Nunnenkamp & Susann Thiel & Rainer Thiele, 2010. "Aid Allocation by German NGOs," KOF Working papers 10-247, KOF Swiss Economic Institute, ETH Zurich.
    5. repec:got:cegedp:92 is not listed on IDEAS
    6. Lisa Maria Dellmuth & Michael F Stoffel, 2012. "Distributive politics and intergovernmental transfers: The local allocation of European Union structural funds," European Union Politics, , vol. 13(3), pages 413-433, September.

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    More about this item

    Keywords

    NGO aid; aid allocation; official co-financing; financial dependence;
    All these keywords.

    JEL classification:

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

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