Aid Allocation by German NGOs: Does the Degree of Official Financing Matter?

25 Pages Posted: 21 Nov 2012

See all articles by Axel Dreher

Axel Dreher

Heidelberg University

Peter Nunnenkamp

University of Kiel

Susann Thiel

affiliation not provided to SSRN

Rainer Thiele

Kiel Institute for the World Economy

Date Written: November 2012

Abstract

Using a new data set for 41 German non‐governmental organisations (NGOs), we analyse the allocation of NGO aid across recipient countries in a Tobit regression framework. By identifying for each NGO the degree of official financing, we address the largely unresolved issue of whether financial dependence on the government impairs the targeting of NGO aid. It turns out that German NGOs are more active in poorer countries, while they do not complement official aid by working under difficult local conditions. Beyond a certain threshold, rising financial dependence weakens their poverty orientation and provides an incentive to engage in ‘easier’ environments. In addition, we find that the NGOs follow the state as well as NGO peers when allocating aid. This herding behaviour is, however, hardly affected by the degree of official financing.

Suggested Citation

Dreher, Axel and Nunnenkamp, Peter and Thiel, Susann and Thiele, Rainer, Aid Allocation by German NGOs: Does the Degree of Official Financing Matter? (November 2012). The World Economy, Vol. 35, Issue 11, pp. 1448-1472, 2012. Available at SSRN: https://ssrn.com/abstract=2178876 or http://dx.doi.org/10.1111/j.1467-9701.2012.01455.x

Axel Dreher (Contact Author)

Heidelberg University ( email )

Grabengasse 1
Heidelberg, 69117
Germany

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

Peter Nunnenkamp

University of Kiel ( email )

D-24100 Kiel
Germany

Susann Thiel

affiliation not provided to SSRN

No Address Available

Rainer Thiele

Kiel Institute for the World Economy ( email )

P.O. Box 4309
Kiel, D-24100
Germany
+49 431 8814 215 (Phone)
+49 431 8814 500 (Fax)

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