Aid Delivery Through Non-Governmental Organisations: Does the Aid Channel Matter for the Targeting of Swedish Aid?

30 Pages Posted: 3 Feb 2010

See all articles by Axel Dreher

Axel Dreher

Heidelberg University

Florian Mölders

German Institute for Economic Research (DIW Berlin)

Peter Nunnenkamp

University of Kiel

Abstract

This paper analyses whether aid channelled through non-governmental organisations (NGOs) is less affected by selfish donor motivations and better targeted to needy recipient countries than aid distributed by state agencies. We employ Tobit (and Probit) models and make use of an exceptionally detailed database that allows an assessment of the allocation of Swedish aid channelled through NGOs in comparison to the allocation of Swedish official aid. Our analysis provides mixed results. On the one hand, NGOs appear to be altruistic as far as available indicators on political and commercial motivations of aid can tell. On the other hand, needs-based targeting of aid by NGOs turns out to be surprisingly weak. GDP per capita of recipient countries shapes the allocation of official aid, but not that of aid channelled through NGOs. The headcount of absolute poverty has a significantly positive effect on aid allocation, but its impact is not particularly strong when NGOs are involved. Overall, the Swedish case supports the sceptical view that NGOs are not necessarily superior donors compared to state aid agencies.

Suggested Citation

Dreher, Axel and Mölders, Florian and Nunnenkamp, Peter, Aid Delivery Through Non-Governmental Organisations: Does the Aid Channel Matter for the Targeting of Swedish Aid?. World Economy, Vol. 33, No. 2, pp. 147-176, February 2010. Available at SSRN: https://ssrn.com/abstract=1546715 or http://dx.doi.org/10.1111/j.1467-9701.2009.01233.x

Axel Dreher (Contact Author)

Heidelberg University ( email )

Grabengasse 1
Heidelberg, 69117
Germany

HOME PAGE: http://www.axel-dreher.de

Florian Mölders

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Peter Nunnenkamp

University of Kiel ( email )

D-24100 Kiel
Germany

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