Bias in Aid Allocation? Genetic Distance-Based Evidence

26 Pages Posted: 17 Sep 2013

See all articles by Mohamad Al-Ississ

Mohamad Al-Ississ

The American University in Cairo

Dina Abdallah

The American University in Cairo

Date Written: August 1, 2013

Abstract

Do donor countries send more bilateral aid to recipients who are ethnically closer to them? This question is explored using a unique dataset on genetic distance which proxies for the time since two populations last shared a common ancestor. We control for conventional determinants of aid allocation and introduce new controls measuring economic, cultural and geographic distance between countries. We find that donor countries send more aid to genetically closer recipient countries. We investigate three potential causal mechanisms: immigrant lobbying, discrimination, and increased trust between ethnically similar people. Consistent with the trust literature, we find evidence for the latter.

Keywords: bilateral aid, genetic distance, trust, economic development

JEL Classification: F35, O1, R12, Z10

Suggested Citation

Al-Ississ, Mohamad and Abdallah, Dina, Bias in Aid Allocation? Genetic Distance-Based Evidence (August 1, 2013). Available at SSRN: https://ssrn.com/abstract=2326208 or http://dx.doi.org/10.2139/ssrn.2326208

Mohamad Al-Ississ (Contact Author)

The American University in Cairo ( email )

P.O. Box 2511
Cairo
Egypt

Dina Abdallah

The American University in Cairo ( email )

113 Kasr El Aini St., P.O. Box 2511
Cairo 11511
United States

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