Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/3648
Authors: 
Canavire-Bacarreza, Gustavo
Nunnenkamp, Peter
Thiele, Rainer
Triveño, Luis
Year of Publication: 
2005
Series/Report no.: 
Kieler Arbeitspapiere 1253
Abstract: 
In this paper, we perform a Tobit analysis of aid allocation, covering the period 1999-2002 and accounting for both altruistic and selfish donor motives. It turns out that poorer countries get clearly more aid from both bilateral and multilateral donors. Most donors are also found to direct significantly more aid to well-governed recipients if governance is measured by the World Bank?s Country Policy and Institutional Assessment (CPIA). If the CPIA is replaced by the Kaufmann index on institutional conditions in recipient countries, however, the policy orientation of aid becomes extremely weak. In contrast to a recent paper by Dollar and Levin, our estimates do not suggest that multilateral aid is more poverty- and policy-oriented than bilateral aid. Post-conflict resolution emerges as a significant determinant of aid allocation in 2002. The importance of selfish aid motives clearly differs between bilateral and multilateral donors. In particular, the export-related self- interest of donor countries provided a fairly strong incentive to grant bilateral aid, as did colonial ties.
Subjects: 
Foreign aid allocation
Donor motives
Tobit analysis
JEL: 
C24
F35
Document Type: 
Working Paper

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