Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/54129
Authors: 
Jones, Sam
Year of Publication: 
2011
Series/Report no.: 
Working paper // World Institute for Development Economics Research 2011,04
Abstract: 
The recent financial crisis has rekindled interest in the foreign aid supply behaviour of bilateral donors. Using the latest data covering the period 1960-2009, this paper examines how such behaviour is related to domestic factors. Based on a simple empirical model, a distinction is made between long-run supply trends and short-run dynamics, which motivates use of error correction methods. Panel econometric techniques are employed that are consistent in the presence of parameter heterogeneity and cross-section dependence. Results support the error correction framework, but point to very substantial heterogeneity between countries. There is also good evidence that donor behaviour continues to evolve over time. As such, past trends in aid supplies are unlikely to provide a good guide to those of the future.
Subjects: 
foreign aid
bilateral donors
panel data
error correction
heterogeneity
JEL: 
F35
C23
F42
ISBN: 
978-92-9230-367-9
Document Type: 
Working Paper

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