Why Donors of Foreign Aid Do Not Coordinate: The Role of Competition for Export Markets and Political Support

Kiel Working Paper No. 1825

39 Pages Posted: 17 Oct 2015

See all articles by Andreas Fuchs

Andreas Fuchs

University of Goettingen (Gottingen) - Faculty of Economics and Business Administration; Kiel Institute for the World Economy

Peter Nunnenkamp

University of Kiel

Hannes Öhler

University of Goettingen (Gottingen)

Multiple version iconThere are 2 versions of this paper

Date Written: February 1, 2013

Abstract

Development assistance has been criticized for a lack of coordination between aid donors. This paper argues that competition for export markets and political support prevents donor countries from closer coordination of aid activities. To test these hypotheses, we perform logit and fractional logit estimations for a large sample of recipient countries and aid activities since the early 1970s. Our empirical results reveal that export competition between donors is a major impediment to aid coordination. Tough less conclusive, we also find some evidence that donors’ competition over political support prevents them from coordinating aid activities more closely.

Keywords: Development aid, donor coordination, trade interests, export similarity, UN voting

JEL Classification: F35, F42, F53

Suggested Citation

Fuchs, Andreas and Nunnenkamp, Peter and Öhler, Hannes, Why Donors of Foreign Aid Do Not Coordinate: The Role of Competition for Export Markets and Political Support (February 1, 2013). Kiel Working Paper No. 1825. Available at SSRN: https://ssrn.com/abstract=2674632 or http://dx.doi.org/10.2139/ssrn.2674632

Andreas Fuchs (Contact Author)

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

Platz der Goettinger Sieben 3
Goettingen, 37073
Germany

Kiel Institute for the World Economy ( email )

Kiellinie 66
Kiel, Schleswig-Hosltein 24105
Germany

Peter Nunnenkamp

University of Kiel ( email )

D-24100 Kiel
Germany

Hannes Öhler

University of Goettingen (Gottingen) ( email )

Platz der Gottinger Sieben 3
Gottingen, D-37073
Germany

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