Lobbying by ethnic groups and aid allocation

We develop a political-economic model of foreign aid allocation. Each ethnic group in the donor country lobbies the government to allocate more aid to its country of origin, and the government accepts political contributions from lobby groups. Initial per-capita income of the recipients and those of the ethnic groups are shown to be important determinants of the solution of the political equilibrium. We also examine the effects of changes in the degree of corruption, aid fatigue, and ethnic composition, in the donor country on the allocation of aid.

Aid allocation of the emerging Central and Eastern European donors

This paper examines the main characteristics of the (re-)emerging foreign aid policies of the Visegrád countries (the Czech Republic, Hungary, Poland, Slovakia), concentrating on the allocation of their aid resources. I adopt an econometric approach, similar to the ones used in the literature, for analysing the aid allocation of the OECD DAC donors. Using this approach, I examine the various factors that influence aid allocation of the Visegrád countries, using data for the years between 2001 and 2008. The most important conclusion is that the amount of aid a partner country gets from the four emerging donors is not influenced by the level of poverty or the previous performance of the recipients (measured by the level of economic growth or the quality of institutions). The main determining factor seems to be geographic proximity, as countries in the Western Balkans and the Post-Soviet region receive much more aid from the Visegrád countries than other recipients. Historical ties (pre-1989 development relations) and international obligations in the cases of Afghanistan and Iraq are also found to be significant explanatory factors. This allocation is in line with the foreign political and economic interests of these new donors. Although there are clear similarities between the four donors, this paper also identifies some individual country characteristics.

Aid Allocation of the Emerging Central and Eastern European Donors

The paper examines the main characteristics of the (re)emerging foreign aid policies of the Visegrád countries (the Czech Republic, Hungary, Poland, Slovakia), concentrating on the allocation of their aid resources. We adopt an econometric approach, similar to the ones used in the literature for analyzing the aid allocation of the OECD DAC donors. Using this approach, we examine the various factors that influence aid allocation of the Visegrád countries, using data for the years between 2001 and 2008. Our most important conclusion is that the amount of aid a partner county gets from the four emerging donors is not influenced by the level of poverty or the previous performance (measured by the level of economic growth or the quality of institutions) of the recipients. The main determining factor seems to be geographic proximity, as countries in the Western-Balkans and the Post-Soviet region receive much more aid from the Visegrád countries than other recipients. Historical ties (pre-1989 development relations) and international obligations in the case of Afghanistan and Iraq are also found to be significant explanatory factors. This allocation is in line with the foreign political and economic interests of these new donors. While there are clear similarities between the four donors, the paper also identifies some individual country characteristics.

Aid Allocation of the Emerging Central and Eastern European Donors

The paper examines the main characteristics of the (re)emerging foreign aid policies of the Visegrád countries (the Czech Republic, Hungary, Poland, Slovakia), concentrating on the allocation of their aid resources. We adopt an econometric approach, similar to the ones used in the literature for analyzing the aid allocation of the OECD DAC donors. Using this approach, we examine the various factors that influence aid allocation of the Visegrád countries, using data for the years between 2001 and 2008. Our most important conclusion is that the amount of aid a partner county gets from the four emerging donors is not influenced by the level of poverty or the previous performance (measured by the level of economic growth or the quality of institutions) of the recipients. The main determining factor seems to be geographic proximity, as countries in the Western-Balkans and the Post-Soviet region receive much more aid from the Visegrád countries than other recipients. Historical ties (pre-1989 development relations) and international obligations in the case of Afghanistan and Iraq are also found to be significant explanatory factors. This allocation is in line with the foreign political and economic interests of these new donors. While there are clear similarities between the four donors, the paper also identifies some individual country characteristics.

Humanitarianism or self-serving hypocrisy? : the provision of aid to South Africa under the Hawke-Keating and Howard governments

General perceptions of foreign aid commonly engender images of humanitarianism and altruism, whereby the humanitarian needs of the recipient of development assistance are of the utmost priority of the aid donor. However, the Australian governments led by Hawke, Keating and Howard often gave humanitarianism a low emphasis, frequently placing Australia’s own foreign policy and economic concerns at the forefront of aid allocation – often unashamedly. This self-interest met through aid meant that most was provided to Australia’s regional neighbourhood, neglecting some of the poorest, most struggling states, including South Africa. Other issues and events, including the Cold War, apartheid, terrorism and HIV/AIDS also affected Australia’s aid policy; mostly, they were used as excuses to limit aid to states like South Africa.

Are democratising countries ‘rewarded’ with higher levels of foreign aid?

The paper examines how flows of foreign aid have reacted to events of democratisation in developing countries. Using a panel dataset of 136 aid-receiving countries between 1980 and 2009, aid allocation regressions reveal that Western donors in general have tended to react to visible, major democratic transitions by increasing aid to the partner country, but no significant increases can be identified in the case of countries introducing smaller democratic reforms. The increases in aid flows are not sustained over time, implying that donors do not provide long-term support to nascent democracies. Also, democratisations in Sub-Saharan Africa do not seem to have been rewarded with higher levels of aid.

Are Democratizing Countries ‘Rewarded’ with Higher Levels of Foreign Aid?

The paper examines how flows of foreign aid have reacted to events of democratization in developing countries. Using a panel dataset of 136 aid receiving countries between 1980 and 2009, aid allocation regressions reveal that donors in general have tended to react to visible, major democratic transitions by increasing aid to the partner country, but no significant increases can be identified in case of countries introducing smaller democratic reforms. The increases in aid flows are not sustained over time, implying that donors do not provide long term support to nascent democracies. Also, democratizations in Sub-Saharan Africa do not seem to have been rewarded with higher levels of aid.

Mapping evidence gaps in anti-corruption: assessing the state of the operationally relevant evidence on donors' actions and approaches to reducing corruption

This paper charts the current evidence on effectiveness of different anti-corruption reforms, and identifies significant evidence gaps. Despite a substantial amount of literature on corruption, this review found very few studies focusing on anti-corruption reforms, and even fewer that credibly assess issues of effectiveness and impact. The evidence was strong for only two types of interventions: public financial management (PFM) reforms and supreme audit institutions (SAIs). For PFM, the evidence in general showed positive results, whereas the effectiveness was mixed for SAIs. No strong evidence indicates that any of the interventions pursued have been ineffective, but there is fair evidence that anti-corruption authorities, civil service reforms and the use of corruption conditionality in aid allocation decisions in general have not been effective. The paper advocates more operationally-relevant research and rigorous evaluations to build up the missing evidence base, particularly in conflict-afflicted states, in regards to the private sector, and on the interactions and interdependencies between different anti-corruption interventions.

Competition for aid and trade policy

This paper considers the optimal allocation of a given amount of foreign aid between two recipient countries. It is shown that, given consumer preferences, a country following a more restrictive trade policy would receive a smaller share of the aid if the donor country maximises its own welfare in allocating aid. If, on the other hand, the donor country allocates aid in order to maximize the sum of the welfare of the two recipient countries, the result is just the opposite. Finally, we analyze the situation where the recipient countries compete with each other for the given amount of aid. It is shown that this competition tends to lower the level of optimal tariffs in the recipient countries.