Foreign Assistance and Emigration: Accounting for the Role of Non-Transferred Aid

25 Pages Posted: 1 Mar 2019

See all articles by Mauro Lanati

Mauro Lanati

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS)

Rainer Thiele

Kiel Institute for the World Economy

Date Written: February 2019

Abstract

Since policymakers increasingly regard foreign aid as a means to manage international flows of migrants, it is important to obtain accurate empirical evidence on the complex link between aid and migration. Recent research has shown that the impact of foreign assistance on migrant flows is highly heterogenous across aid categories. In this paper, we focus on a dimension of heterogeneity that has so far not been considered in the literature, namely whether or not the delivery of foreign aid is associated with a transfer of resources to the recipient country. We show in a first step that non-transferred aid is quantitatively important, accounting for more than 25 percent of overall aid given by OECD DAC donors in 2016. Running separate gravity-type regressions for transferred and non-transferred aid, we then find that transferred aid has a much stronger (negative) impact on migration than the previously used total aid variable that includes the non-transferred component. As may be expected, non-transferred aid itself does not appear to affect migrant flows. A high share of non-transferred aid would therefore be at odds with donors’ stated goal of tackling the root causes of migration.

Keywords: Foreign Aid, Migration

JEL Classification: F22, F35, O15

Suggested Citation

Lanati, Mauro and Thiele, Rainer, Foreign Assistance and Emigration: Accounting for the Role of Non-Transferred Aid (February 2019). Robert Schuman Centre for Advanced Studies Research Paper No. RSCAS 2019/18. Available at SSRN: https://ssrn.com/abstract=3344414 or http://dx.doi.org/10.2139/ssrn.3344414

Mauro Lanati (Contact Author)

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

Villa La Fonte, via delle Fontanelle 18
50016 San Domenico di Fiesole
Florence, Florence 50014
Italy

Rainer Thiele

Kiel Institute for the World Economy ( email )

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

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