IDEAS home Printed from https://ideas.repec.org/p/zbw/ifwkwp/2128.html
   My bibliography  Save this paper

Does private aid follow the flag? An empirical analysis of humanitarian assistance

Author

Listed:
  • Fuchs, Andreas
  • Öhler, Hannes

Abstract

Little is known about foreign aid provided by private donors. This paper contributes to closing this research gap by comparing the allocation of private humanitarian aid to that of official humanitarian aid awarded to 140 recipient countries over the 2000-2016 period. We construct a new database that offers information on the country in which the headquarters of private donors are located to test whether private donors follow the aid allocation pattern of their home country. Our empirical results confirm that private aid "follows the flag." This finding is robust against the inclusion of various fixed effects, estimating instrumental variables models, and disaggregating private aid into corporate aid and NGO aid. Donor country-specific estimations reveal that private aid from China, Sweden, the United Kingdom, and the United States "follow the flag".

Suggested Citation

  • Fuchs, Andreas & Öhler, Hannes, 2019. "Does private aid follow the flag? An empirical analysis of humanitarian assistance," Kiel Working Papers 2128, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:2128
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/196140/1/1664875905.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gao, Fox & Faff, Robert & Navissi, Farshid, 2012. "Corporate philanthropy: Insights from the 2008 Wenchuan Earthquake in China," Pacific-Basin Finance Journal, Elsevier, vol. 20(3), pages 363-377.
    2. Annen, Kurt & Strickland, Scott, 2017. "Global samaritans? Donor election cycles and the allocation of humanitarian aid," European Economic Review, Elsevier, vol. 96(C), pages 38-47.
    3. Lundsgaarde, Erik, 2013. "Complementarity in development: bringing private foundations on board," Briefing Papers 10/2013, German Institute of Development and Sustainability (IDOS).
    4. Michael A. Bailey & Anton Strezhnev & Erik Voeten, 2017. "Estimating Dynamic State Preferences from United Nations Voting Data," Journal of Conflict Resolution, Peace Science Society (International), vol. 61(2), pages 430-456, February.
    5. Richard Bluhm & Martin Gassebner & Sarah Langlotz & Paul Schaudt, 2021. "Fueling conflict? (De)escalation and bilateral aid," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 36(2), pages 244-261, March.
    6. Fink, Günther & Redaelli, Silvia, 2011. "Determinants of International Emergency Aid--Humanitarian Need Only?," World Development, Elsevier, vol. 39(5), pages 741-757, May.
    7. 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.
    8. Eric Neumayer, 2005. "Is the Allocation of Food Aid Free from Donor Interest Bias?," Journal of Development Studies, Taylor & Francis Journals, vol. 41(3), pages 394-411.
    9. 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.
    10. 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.
    11. Marianne Bertrand & Matilde Bombardini & Raymond Fisman & Francesco Trebbi, 2020. "Tax-Exempt Lobbying: Corporate Philanthropy as a Tool for Political Influence," American Economic Review, American Economic Association, vol. 110(7), pages 2065-2102, July.
    12. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, December.
    13. Vreeland,James Raymond & Dreher,Axel, 2014. "The Political Economy of the United Nations Security Council," Cambridge Books, Cambridge University Press, number 9780521518413, September.
    14. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
    15. Oscar Becerra & Eduardo Cavallo & Ilan Noy, 2014. "Foreign Aid in the Aftermath of Large Natural Disasters," Review of Development Economics, Wiley Blackwell, vol. 18(3), pages 445-460, August.
    16. 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.
    17. Martin Gassebner & Alexander Keck & Robert Teh, 2010. "Shaken, Not Stirred: The Impact of Disasters on International Trade," Review of International Economics, Wiley Blackwell, vol. 18(2), pages 351-368, May.
    18. Daniel Kaufmann & Aart Kraay & Massimo Mastruzzi, 2004. "Governance Matters III: Governance Indicators for 1996, 1998, 2000, and 2002," The World Bank Economic Review, World Bank, vol. 18(2), pages 253-287.
    19. Becerra, Oscar & Cavallo, Eduardo & Noy, Ilan, 2015. "Where is the money? Post-disaster foreign aid flows," Environment and Development Economics, Cambridge University Press, vol. 20(5), pages 561-586, October.
    20. Santos Silva, J.M.C. & Tenreyro, Silvana, 2011. "Further simulation evidence on the performance of the Poisson pseudo-maximum likelihood estimator," Economics Letters, Elsevier, vol. 112(2), pages 220-222, August.
    21. Anna Fruttero & Varun Gauri, 2005. "The Strategic Choices of NGOs: Location Decisions in Rural Bangladesh," Journal of Development Studies, Taylor & Francis Journals, vol. 41(5), pages 759-787.
    22. Iñaki Aldasoro & Peter Nunnenkamp & Rainer Thiele, 2010. "Less aid proliferation and more donor coordination? The wide gap between words and deeds," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(7), pages 920-940.
    23. Fuchs, Andreas & Richert, Katharina, 2018. "Development Minister Characteristics and Aid Giving," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 53, pages 186-204.
    24. Esser, Daniel E. & Keating Bench, Kara, 2011. "Does Global Health Funding Respond to Recipients' Needs? Comparing Public and Private Donors' Allocations in 2005-2007," World Development, Elsevier, vol. 39(8), pages 1271-1280, August.
    25. Axel Dreher & Peter Nunnenkamp & Hannes Öhler & Johannes Weisser, 2012. "Financial Dependence and Aid Allocation by Swiss NGOs: A Panel Tobit Analysis," Economic Development and Cultural Change, University of Chicago Press, vol. 60(4), pages 829-867.
    26. 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.
    27. Christina L. Davis & Andreas Fuchs & Kristina Johnson, 2019. "State Control and the Effects of Foreign Relations on Bilateral Trade," Journal of Conflict Resolution, Peace Science Society (International), vol. 63(2), pages 405-438, February.
    28. Abigail Barr & Marcel Fafchamps, 2006. "A client-community assessment of the NGO sector in Uganda," Journal of Development Studies, Taylor & Francis Journals, vol. 42(4), pages 611-639.
    29. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-474, June.
    30. 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.
    31. Alan Muller & Gail Whiteman, 2009. "Exploring the Geography of Corporate Philanthropic Disaster Response: A Study of Fortune Global 500 Firms," Journal of Business Ethics, Springer, vol. 84(4), pages 589-603, February.
    32. 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.
    33. Alan Muller & Gail Whiteman, 2009. "Exploring the Geography of Corporate Philanthropic Disaster Response: A Study of Fortune Global 500 Firms," Journal of Business Ethics, Springer, vol. 84(4), pages 605-605, February.
    34. Nathan Nunn & Nancy Qian, 2014. "US Food Aid and Civil Conflict," American Economic Review, American Economic Association, vol. 104(6), pages 1630-1666, June.
    35. Dreher, Axel & Sturm, Jan-Egbert & Vreeland, James Raymond, 2009. "Global horse trading: IMF loans for votes in the United Nations Security Council," European Economic Review, Elsevier, vol. 53(7), pages 742-757, October.
    36. 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.
    37. Andrews,Donald W. K. & Stock,James H. (ed.), 2005. "Identification and Inference for Econometric Models," Cambridge Books, Cambridge University Press, number 9780521844413, September.
    38. Thomas Eisensee & David Strömberg, 2007. "News Droughts, News Floods, and U. S. Disaster Relief," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(2), pages 693-728.
    39. Michael Faye & Paul Niehaus, 2012. "Political Aid Cycles," American Economic Review, American Economic Association, vol. 102(7), pages 3516-3530, December.
    40. Christian Bommer & Axel Dreher & Marcello Perez-Alvarez, 2018. "Regional and Ethnic Favoritism in the Allocation of Humanitarian Aid," CESifo Working Paper Series 7038, CESifo.
    41. Eric Werker & Faisal Z. Ahmed, 2008. "What Do Nongovernmental Organizations Do?," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 73-92, Spring.
    42. United Nations UN, 2015. "Transforming our World: the 2030 Agenda for Sustainable Development," Working Papers id:7559, eSocialSciences.
    43. Gao, Yongqiang, 2011. "Philanthropic disaster relief giving as a response to institutional pressure: Evidence from China," Journal of Business Research, Elsevier, vol. 64(12), pages 1377-1382.
    44. 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.
    45. Gilles Nancy & Boriana Yontcheva, 2006. "Does NGO Aid Go to the Poor? Empirical Evidence from Europe," IMF Working Papers 2006/039, International Monetary Fund.
    46. Emmanuel Frot & Javier Santiso, 2011. "Herding in Aid Allocation," Kyklos, Wiley Blackwell, vol. 64(1), pages 54-74, February.
    47. Axel Dreher & Peter Nunnenkamp & Susann Thiel & Rainer Thiele, 2012. "Aid Allocation by German NGOs: Does the Degree of Official Financing Matter?," The World Economy, Wiley Blackwell, vol. 35(11), pages 1448-1472, November.
    48. Ran Zhang & Jigao Zhu & Heng Yue & Chunyan Zhu, 2010. "Corporate Philanthropic Giving, Advertising Intensity, and Industry Competition Level," Journal of Business Ethics, Springer, vol. 94(1), pages 39-52, June.
    49. 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.
    50. 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.
    51. Büthe, Tim & Major, Solomon & Souza, André de Mello e, 2012. "The Politics of Private Foreign Aid: Humanitarian Principles, Economic Development Objectives, and Organizational Interests in NGO Private Aid Allocation," International Organization, Cambridge University Press, vol. 66(4), pages 571-607, October.
    52. Dietrich, Simone, 2016. "Donor Political Economies and the Pursuit of Aid Effectiveness," International Organization, Cambridge University Press, vol. 70(1), pages 65-102, January.
    53. Acht, Martin & Mahmoud, Toman Omar & Thiele, Rainer, 2015. "Corrupt governments do not receive more state-to-state aid: Governance and the delivery of foreign aid through non-state actors," Journal of Development Economics, Elsevier, vol. 114(C), pages 20-33.
    54. Schweinberger, Albert G. & Lahiri, Sajal, 2006. "On the provision of official and private foreign aid," Journal of Development Economics, Elsevier, vol. 80(1), pages 179-197, June.
    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. Eichenauer, Vera Z. & Fuchs, Andreas & Kunze, Sven & Strobl, Eric, 2020. "Distortions in aid allocation of United Nations flash appeals: Evidence from the 2015 Nepal earthquake," World Development, Elsevier, vol. 136(C).
    2. Ann-Sofie Isaksson & Dick Durevall, 2023. "Aid and institutions: Local effects of World Bank aid on perceived institutional quality in Africa," The Review of International Organizations, Springer, vol. 18(3), pages 523-551, July.
    3. Kaplan, Lennart, 2020. "Systemic challenges and opportunities of Franco-German development cooperation," IDOS Discussion Papers 10/2020, German Institute of Development and Sustainability (IDOS).

    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. 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.
    2. repec:bla:annpce:v:89:y:2018:i:1:p:125-155 is not listed on IDEAS
    3. Öhler, Hannes, 2013. "Do Aid Donors Coordinate Within Recipient Countries?," Working Papers 0539, University of Heidelberg, Department of Economics.
    4. repec:awi:wpaper:539 is not listed on IDEAS
    5. Gani ALDASHEV & Cecilia NAVARRA, 2018. "Development Ngos: Basic Facts," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(1), pages 125-155, March.
    6. 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.
    7. Hagen, Rune Jansen, 2014. "Rents and the Political Economy of Development Aid," Working Papers in Economics 07/14, University of Bergen, Department of Economics.
    8. 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.
    9. Acht, Martin & Mahmoud, Toman Omar & Thiele, Rainer, 2015. "Corrupt governments do not receive more state-to-state aid: Governance and the delivery of foreign aid through non-state actors," Journal of Development Economics, Elsevier, vol. 114(C), pages 20-33.
    10. 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.
    11. Acht, Martin & Omar Mahmoud, Toman & Thiele, Rainer, 2014. "Corrupt governments receive less bilateral aid: Governance and the delivery of foreign aid through non-government actors," Kiel Working Papers 1901, Kiel Institute for the World Economy (IfW Kiel).
    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. Huanhuan Zheng & Chen Li, 2022. "Can money buy friendship?—Evidence from the US and China’s competition for influence through foreign aid," The World Economy, Wiley Blackwell, vol. 45(10), pages 3224-3245, October.
    14. 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.
    15. repec:elg:eechap:15325_15 is not listed on IDEAS
    16. Peter Nunnenkamp & Rainer Thiele, 2009. "Sind Nichtregierungsorganisationen die besseren Entwicklungshelfer?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 10(3), pages 266-289, August.
    17. 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.
    18. Eichenauer, Vera Z. & Fuchs, Andreas & Kunze, Sven & Strobl, Eric, 2020. "Distortions in aid allocation of United Nations flash appeals: Evidence from the 2015 Nepal earthquake," World Development, Elsevier, vol. 136(C).
    19. Axel Dreher & Peter Nunnenkamp & Hannes Öhler & Johannes Weisser, 2012. "Financial Dependence and Aid Allocation by Swiss NGOs: A Panel Tobit Analysis," Economic Development and Cultural Change, University of Chicago Press, vol. 60(4), pages 829-867.
    20. Dreher, Axel & Lang, Valentin & Reinsberg, Bernhard, 2024. "Aid effectiveness and donor motives," World Development, Elsevier, vol. 176(C).
    21. Koppenberg, Maximilian & Mishra, Ashok K. & Hirsch, Stefan, 2023. "Food aid and violent conflict: A review and Empiricist’s companion," Food Policy, Elsevier, vol. 121(C).
    22. repec:got:cegedp:92 is not listed on IDEAS
    23. Juergen Bitzer & Erkan Goeren, 2018. "Foreign Aid and Subnational Development: A Grid Cell Analysis," Working Papers V-407-18, University of Oldenburg, Department of Economics, revised Mar 2018.
    24. Iliana Olivié & Aitor Pérez, 2016. "Why don’t donor countries coordinate their aid? A case study of European donors in Morocco," Progress in Development Studies, , vol. 16(1), pages 52-64, January.

    More about this item

    Keywords

    foreign aid; humanitarian assistance; disaster relief; aid allocation; private donors; non-governmental organizations; corporations; private foundations;
    All these keywords.

    JEL classification:

    • H84 - Public Economics - - Miscellaneous Issues - - - Disaster Aid
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:zbw:ifwkwp:2128. 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/iwkiede.html .

    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.