Of Donor Coordination, Free-Riding, Darlings, and Orphans: The Dependence of Bilateral Aid on Other Bilateral Giving

40 Pages Posted: 5 Apr 2013

See all articles by Ronald B. Davies

Ronald B. Davies

University College Dublin (UCD)

Stephan Klasen

University of Goettingen (Gottingen) - Faculty of Economics and Business Administration; CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Date Written: March 31, 2013

Abstract

Using data from 1988 to 2007, we examine to what extent bilateral aid flows of an individual donor to a country depend on aid flows from all other bilateral and multilateral donors to that country. We thereby want to assess to what extent donor coordination, free-riding, selectivity, specialization, and common donor motivations drive bilateral aid allocation as these determinants would point to different dependence structures. Using approaches from spatial econometrics and controlling for endogeneity, we find that other bilateral flows lead to a significant increase in aid flows from a particular donor. The effects are particularly pronounced for recipients in Africa and the Middle East and so-called donor ‘orphans’ who seem to be collectively shunned by bilateral aid donors. The positive dependence also seems be related to donors following the lead of the largest donors. Over time, the positive dependence has become smaller. Overall the results suggest that donor coordination and free-riding are quantitatively less important than common donor interests and selectivity.

Keywords: aid, donor coordination, aid darlings, aid orphans

JEL Classification: F350, F420

Suggested Citation

Davies, Ronald B. and Klasen, Stephan, Of Donor Coordination, Free-Riding, Darlings, and Orphans: The Dependence of Bilateral Aid on Other Bilateral Giving (March 31, 2013). CESifo Working Paper Series No. 4177. Available at SSRN: https://ssrn.com/abstract=2244815

Ronald B. Davies

University College Dublin (UCD) ( email )

Belfield, Dublin 4 4
Ireland

Stephan Klasen (Contact Author)

University of Goettingen (Gottingen) - Faculty of Economics and Business Administration ( email )

Platz der Goettinger Sieben 3
Goettingen, 37073
Germany
+49-551-397303 (Phone)
+49-551-397302 (Fax)

HOME PAGE: www.vwl.wiso.uni-goettingen.de/klasen.html

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
149
rank
193,131
Abstract Views
752
PlumX Metrics
!

Under construction: SSRN citations while be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information