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Aid allocation by German NGOs: does the degree of public refinancing matter?

Author

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  • Dreher, Axel
  • Nunnenkamp, Peter
  • Thiel, Susann
  • Thiele, Rainer

Abstract

Using a new dataset for 41 German non-governmental organizations (NGOs), we analyze the allocation of NGO aid across recipient countries in a Tobit regression framework. By identifying for each NGO the degree of public refinancing, we address the largely unresolved issue of whether financial dependence on the government impairs the targeting of NGO aid. It turns out that German NGOs are more active in poorer countries, while they do not complement official aid by working under difficult local conditions. Beyond a certain threshold, rising financial dependence weakens their poverty orientation and provides an incentive to engage in “easier” environments. In addition, we find that the NGOs follow the state as well as NGO peers when allocating aid. This herding behavior is, however, hardly affected by the degree of public refinancing.

Suggested Citation

  • Dreher, Axel & Nunnenkamp, Peter & Thiel, Susann & Thiele, Rainer, 2010. "Aid allocation by German NGOs: does the degree of public refinancing matter?," Kiel Working Papers 1584, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1584
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    Cited by:

    1. Peter Nunnenkamp & Hannes Öhler, 2012. "Funding, Competition and the Efficiency of NGOs : An Empirical Analysis of Non‐charitable Expenditure of US NGOs Engaged in Foreign Aid," Kyklos, Wiley Blackwell, vol. 65(1), pages 81-110, February.
    2. Nunnenkamp, Peter & Öhler, Hannes, 2010. "Donations to US based NGOs in international development cooperation: How (un-)informed are private donors?," University of Göttingen Working Papers in Economics 117, University of Goettingen, Department of Economics.
    3. repec:got:cegedp:109 is not listed on IDEAS
    4. repec:got:cegedp:117 is not listed on IDEAS
    5. 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.
    6. Wunderlich Anne C., 2014. "Notwendigkeit, Möglichkeiten und Herausforderungen der Korruptionsbekämpfung und -prävention deutscher NGOs in der Entwicklungszusammenarbeit: Anmerkungen zum gleichnamigen Buch von Kerstin Frenzel," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 65(1), pages 493-496, January.
    7. Öhler, Hannes, 2013. "Do Aid Donors Coordinate Within Recipient Countries?," Working Papers 0539, University of Heidelberg, Department of Economics.
    8. repec:awi:wpaper:539 is not listed on IDEAS

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    More about this item

    Keywords

    NGO aid; aid allocation; public refinancing;
    All these keywords.

    JEL classification:

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

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