Aid Delivery through Non‐governmental Organisations: Does the Aid Channel Matter for the Targeting of Swedish Aid?

This paper analyses whether aid channelled through non‐governmental organisations (NGOs) is less affected by selfish donor motivations and better targeted to needy recipient countries than aid distributed by state agencies. We employ Tobit (and Probit) models and make use of an exceptionally detailed database that allows an assessment of the allocation of Swedish aid channelled through NGOs in comparison to the allocation of Swedish official aid. Our analysis provides mixed results. On the one hand, NGOs appear to be altruistic as far as available indicators on political and commercial motivations of aid can tell. On the other hand, needs‐based targeting of aid by NGOs turns out to be surprisingly weak. GDP per capita of recipient countries shapes the allocation of official aid, but not that of aid channelled through NGOs. The headcount of absolute poverty has a significantly positive effect on aid allocation, but its impact is not particularly strong when NGOs are involved. Overall, the Swedish case supports the sceptical view that NGOs are not necessarily superior donors compared to state aid agencies.     

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

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.     

中国参与WTO贸易援助所面临的问题评析

贸易援助是官方发展援助的重要形式,中国在WTO贸易援助倡议的启动、后续工作及实际参与中起到了积极作用。中国国际经济地位的转变让其他国家产生更高的援助期待。发达国家对发展中国家提供的贸易援助是其应当承担的国际义务。"南南合作"是发展中国家之间的互助合作形式,其本质是基于平等理念的合作,是贸易援助的补充形式。中国在力所能及的条件下应当尽量与发展中国家开展"南南合作"并在此过程中提供适当援助。完善对外援助法律制度是顺利开展贸易援助、实现援助目的的保障。     

Special drawing rights and development aid

The introduction of the Special Drawing Rights (SDRs) has not fulfilled the wishes of the LDCs. Whereas the industrialised countries look upon SDRs simply as international liquidity reserves, LDCs aim at the linking of SDRs with development aid. Is their concept really as out of place as the industrialised countries maintain it is?     

Aid and the real exchange rate: Dutch disease effects in African countries

There is little evidence to show that official development assistance to sub-Saharan African countries has led to significant improvements of macroeconomic indicators such as export performance. Using four CFA zone countries (Burkina Faso, Côte d'lvoire, Senegal and Togo) as case studies, this article analyses the relationship between aid inflows and the real exchange rate with a view to identifying symptoms of “Dutch disease” in these economies.     

国际双边发展援助对FDI的影响研究——基于17个OECD国家对华发展援助的实证

本文运用扩展的Solow模型阐述了援助影响FDI的理论机制,并以中国为研究主体,以17个OECD国家的数据为样本,实证分析了双边发展援助对FDI的短期、中期和长期效应。实证结果显示:在短期,17个OECD国家的对华发展援助挤出了这些国家对中国的FDI,但在中长期促进了这些国家对中国的FDI,并且时间越长,促进效应越强。因此,发达国家向中国投入发展援助是有效的。双方应充分利用这种有效性,发达国家现期不适宜取消对华发展援助,中国应积极寻求双边发展援助来促进新兴产业和中西部地区的发展。     

Are Trade Preferences more Effective than Aid in Supporting Exports? Evidence from the ‘Everything But Arms’ Preference Scheme

This study examines the effect of the ‘Everything But Arms’ (EBA) trade preferences regime on exports from the African, Caribbean and Pacific countries (ACP) to the European Union (EU). With this aim, an augmented gravity model is estimated for exports from the 79 ACP countries to the EU‐15 for the time period of 1995—2013 using panel data techniques. The results are used to quantify the effect of the eligibility for EBA preferences on the export performance of the ACP least developed countries (LDCs) and to relate it to the impact of official development assistance on exports. In addition to their separate effects, the combined impact of EBA and aid flows is examined. The main results do not provide evidence for an additional positive effect of the EBA agreement on the export performance of the ACP LDCs. However, receiving aid shows a significant and positive effect on exports from EBA‐eligible ACP countries to the EU‐15, supporting an EU development strategy that includes both sorts of assistance, aid and trade preferences.     

Developments in the international distribution of income

The question of income distribution played a very important role in practical and theoretical development policy during the seventies. World market conditions were blamed for the fact that the income gap between industrialised countries and developing countries was widening. The demands to which this has given rise range from calls for “greater reliance on market forces”, “modification of the market form” and “greater market intervention” to insistence on the complete abolition of free market relationships. How has the relative income position of various groups of developing countries evolved in the last few decades?     

Problems of international development taxes

Attempts by the developing countries to replace the largely voluntary provision of development aid by a system that would free official resource flows from the possibility of political interference by the donors and from the need for yearly budgetary allocations have been going on for some time. The present author here examines the proposal of the Group of 77 for a Financing System for Science and Technology for Development.     

International trade in oil: Effects on the balance of payments and exchange rates

Oil price increases and the persistent OPEC current account surpluses were considered the main problems of economic development in many industrial and developing countries long after the first oil crisis. Since 1983, however, the OPEC surpluses have been completely absorbed and the official base price of petroleum has fallen for the first time in twenty years, although admittedly in terms of a “strong” dollar. Has the serious damage suffered by oil-importing countries in the two oil shocks been completely neutralised, or are the economies of many countries still strongly influenced by the actions and decisions of the OPEC countries?     

The concept of absorptive capacity: Origins,content and practical relevance

Ever since the end of the Second World War there have been regular calls for a comprehensive and extensive “Marshall Plan” for Third World countries. One of the most popular lines of counter-argument is that developing countries do not even possess the necessary absorptive capacity to make effective use of larger international transfers of purchasing power. On the strength of this “Low Absorptive Capacity Thesis”, as S.P. Schatz called it in 1961¹, a politically unpleasant prlblem, yet one which represents a question of principle in development policy, has for years been dismissed or passed on to the fundamental planning departments of development aid institutions and to the representatives of science and research. What exactly lies behind this problem?     

Targeting Aid to the Needy and Deserving: Nothing But Promises?

By reallocating aid to where it is needed most and where a productive use is most likely, donors could help alleviate poverty in developing countries. The rhetoric of donors suggests that this insight has increasingly shaped the allocation of aid. We assess the poverty and policy orientation of bilateral and multilateral aid in different ways. In addition to presenting stylised facts based on bivariate correlations, we apply a Tobit model that captures both altruistic and selfish donor motives. We find little evidence supporting the view that the targeting of aid has improved significantly. Most donors provide higher aid to relatively poor countries, but so far the fight against poverty has not resulted in a stronger focus on needy recipients with favourable local conditions. The estimation results reveal that the policy orientation of aid critically depends on how local conditions are measured. In general, however, donors appear to be less policy‐oriented than poverty‐oriented. The response of donors to changing institutional and policy conditions in recipient countries turns out to be fairly weak. We reject the proposition that multilateral aid is clearly superior to bilateral aid in terms of rewarding poor countries with better policies and institutions.     

Food aid: An effective instrument of development policy?

After over thirty years experience with food aid, there is consensus only on its use as a means of mitigating acute distress; except with regard to disaster relief of that kind, opinions are divided on the rationale of food aid deliveries from industrial countries with a food surplus to Third World countries with a deficit. What are the main arguments for and against food aid, and in which direction has the EC’s food aid programme developed?     

The economic,social and political prerequisites of development

Whether development aid promises to be successful depends not least on the conditions prevalling in the developing countries themselves. A study commissioned by the German Federal Ministry for Economic Cooperation has examined whether it is possible to identify universal requirements for successful development in Third World countries. Its main findings are presented below.     

The role of China's aid and ODI in the economic growth of African countries

Has external capital, such as foreign aid and foreign direct investment (FDI), been able to help the economic growth in host countries? Our paper examines the effects of China's aid and its overseas direct investment (ODI) on economic growth in 47 African countries from 2003 to 2013. We find that China's aid has significant positive effects on African economic growth. However, China's ODI plays no major role in African countries' economic growth. In addition, the relationship between aid and growth varies according to the different categories of aid, and its marginal contribution is nonlinear.     

Automatic transfer payments to developing countries

As a more critical view is being taken of traditional development aid concepts, alternative means of advancing the resource transfer between industrialized and developing countries have attracted increasing attention in recent years. A system of tendentially automated transfer payments to developing countries is one of these alternatives. The author of the following article examines whether such a system has a chance of meeting common interests of industrialized and developing countries and how it could be elaborated to make it more effective.     

Reforms — Not revolutionary changes

Development aid is rightly considered to be one of the most important tasks of our time. Irrespective of whether this aid is seen from the political, economic or simply from the humanitarian aspect, there is no question of its urgency and of its broad field of application. On the other hand, there, is very little agreement in donor and recipient countries about the adequate volume of development aid, the methods of raising it and the forms of distribution. But in view of the enormous magnitude and the diversity of range of this task, it would be a mistake to resign or—panic-stricken—to wish to achieve too much too soon. What donor countries can and must do is to plan aid within the limits of their possibilities and in accordance with the circumstances of developing countries and be resolute in its execution. The following interview shall help to clarify the principles and forms of West Germany's development aid, as well as improvements in its effective implementation.     

Problems now and in the past

In some places, voices are raised today which assert that development aid is not worth the noise that is being made about it, because the industrialised countries went through exactly the same phase of development by their own, unaided efforts and still had arrived where they are now. Any development aid, so it is said, will only paralyse the determination of LDCs to aid themselves. The author discusses this assertion in the following article.     

Scaling‐up Foreign Aid: Will the ‘Big Push’ Work?

International donors are substantially scaling‐up aid programmes. At the same time, there are widespread reservations over how much aid recipient countries can use effectively. Such concerns are supported by the aid effectiveness literature which finds that there are limits to the amounts of aid recipients can efficiently absorb. This article demonstrates that a ‘big push’ in foreign aid will not lead to diminishing returns as long as donors get the inter‐country allocation of aid right. This is true even if donors provide aid at levels equal to the well‐known target of 0.7 per cent of their gross national income.