Is NGO aid not so different after all? Comparing the allocation of Swiss aid by private and official donors

Being closer to the poor, NGOs are widely believed to provide better targeted aid than state agencies. But empirical evidence is largely lacking. We contribute to closing this gap by drawing on an exceptionally detailed Swiss database that covers different forms of NGO aid and several official aid benchmarks. The Tobit estimations account for both altruistic and selfish aid motivations. Whether or not NGOs provide better targeted aid depends on the source of NGO funding as well as the choice of the official benchmark. In contrast to widespread belief, however, the allocation of self-financed NGO aid reveals striking similarities to the allocation of official Swiss development aid.     

The cartel of good intentions: The problem of bureaucracy in foreign aid

Well-meaning national and international bureaucracies dispense foreign aid under conditions in which bureaucracy fails. The environment that created aid bureaucracies led those organizations to (a) define their output as money disbursed rather than service delivered, (b) produce many low-return observable outputs (glossy reports and "frameworks") and few high-return less observable activities like ex - post evaluation, (c) engage in obfuscation, spin control, and amnesia (always describing aid efforts as "new and improved") exhibiting little learning from the past, (d) put enormous demands on scarce administrative skills in poor countries. To change this unhappy equilibrium, policymakers in rich and poor countries should experiment with decentralized markets, matching those who want to help the poor with the poor themselves freely expressing their needs and aspirations.     

Does aid affect inequality?

We show that there was a negative correlation between pro-poor aid and inequality in the period before the mid-2000s. This article provides an explanation for this observed relationship. Using panel data on 34 countries for the period 1996–2014, we test the hypothesis that pro-poor aid has an inequality-reducing effect. To demonstrate that the negative correlation is not spurious, we use dynamic panel techniques with alternative specifications. We show that the share of pro-poor aid has a negative effect on inequality. In addition, we show that the interaction term between the poverty rate and the change in pro-poor aid has a significant effect. These empirical results are consistent with our theoretical predictions. The results imply that aid can reduce inequality by altering the allocation of aid, rather than by increasing the amount of aid.     

When is Foreign Aid Effective in Fighting Terrorism? Threshold Evidence

Building on the previous literature, we assess when foreign aid is effective in fighting terrorism using quantile regressions on a panel of 78 developing countries for the period 1984–2008. Bilateral, multilateral and total aid indicators are used whereas terrorism includes: domestic, transnational, unclear and total terrorism dynamics. We consistently establish that foreign aid (bilateral, multilateral and total) is effective at fighting terrorism exclusively in countries where existing levels of transnational terrorism are highest. This finding is consistent with our theoretical underpinnings because donors have been documented to allocate more aid towards fighting transnational terrorist activities in recipient countries because they are more likely to target their interests. Moreover, the propensity of donor interest at stake is likely to increase with initial levels of transnational terrorism, such that the effect of foreign aid is most significant in recipient countries with the highest levels of transnational terrorism. Policy implications and future research directions are discussed.     

Poverty traps and the robust political economy of development assistance

Robust political economy emphasizes the lack of benevolence and omniscience of would be reformers. In addition, we consider the effects of biased decision-making for the robustness of the policy implications. This paper examines the robustness of the policy implications of models based on coordination failures and poverty traps. In particular, we address the revival in ‘big push’ type models and its policy implications. We argue that attempts to promote economic development through ‘big push’ models lack robustness. JEL Code O1, O20, P26, P41     

A modeling framework for enhancing aid effectiveness

ABSTRACT

The development literature lacks consensus about the link between aid effectiveness and governance improvement. A basic rational actor model is introduced to clarify how donors can influence recipient behaviors and more broadly how foreign aid can support or impede governance quality improvement. Adopting the underutilized perspective of donor behavior, this study identifies mechanisms through which aid hinders governance improvement and offers substantive recommendations about how donors can enhance aid effectiveness, including strategies for donors to raise the level of effort recipients devote to project success.     

日元贷款对中国经济增长的作用研究(1980～2003)

1980～2003年,日本向中国提供了累计达3.3万亿日元的贷款,占所有双边贷款总和的比重约50～60%,是中国最大也最重要的援助提供国.这些日元贷款对中国经济增长的影响如何,这方面的研究十分少见.本文以发展经济学的援助评价理论为基础建立了计量模型,利用1980年以来的数据,对上述问题作了一个尝试性的评价.我们的计量分析结果表明,在1990年前,日元贷款对中国经济增长的贡献不显著,在1990年之后的作用则积极显著,这表明不同的政策环境与援助性贷款的相互作用导致不同的结果.     

1981-2002年间国际金融组织贷款对中国经济增长的贡献研究

改革开放以来,国际金融组织贷款一直是我国对外借款的重要来源,其所占比例始终维持在40%左右,累计金额已达数百亿美元.这些贷款对中国经济增长的影响如何,这方面的研究十分少见.本文以柯布-道格拉斯生产函数的派生模型为基础建立了修正模型,分别利用1978年以来的国家和省级两层数据,对上述问题作了一个尝试性的评价.我们的计量分析结果表明,在1990年前后,国际金融组织贷款对中国经济增长的贡献存在差异.对不同地区的增长贡献也差异较大,表明不同的政策环境与援助性贷款的相互作用结果是不同的.     

The allocation of volatile aid and economic growth: Theory and evidence

We analyse, both theoretically and empirically, the growth effects associated with two components of volatile foreign financial assistance: ‘directly productive’ (or ‘tied’) aid and ‘pure’ aid. We find that scenarios in which aid can hurt the recipient's growth rate emerge only in cases where foreign aid is volatile. As a result, we conclude that it is only in conjunction with the presence of aid variability that aid allocation determines whether foreign aid hurts or promotes long-run growth.     

Bilateral foreign aid: how important is aid effectiveness to people for choosing countries to support?

We conduct a discrete choice experiment to determine how important aid effectiveness is to people relative to other criteria for choosing countries to support with bilateral foreign aid. We find that aid effectiveness is important, on a par with recipient-country need as proxied by the level of hunger and malnutrition. Both criteria are more important than others.     

Short Changing the Value of Democracy for Economic Development in Africa

Official donor policy towards Africa seems to be informed by the twin requirements of alleviating poverty on the one hand and ensuring respect for human rights and democratization on the other. In practice, when these interests conflict, as they usually do in Africa, donors tend to choose to continue supporting dictatorships, arguing that economic development will eventually lead to democratization. This paper argues that this faulty reasoning is a product of modernization theory that has had undue influence in western policy circles. Based on a broad survey of the literature, the paper shows that there is no theoretical or empirical basis for the claim that authoritarian regimes would provide better economic performance than democracies in general and particularly in Africa. Furthermore, available evidence suggests that the lack of democratization (defined broadly to include the substance of democracy such as government accountability and basic freedoms in addition to meaningful democratic elections) is a key constraint on economic and social development in Africa. Finally, the paper argues that even when the empirical case to establish a definite causal relationship between democratization and development cannot be ascertained, a very strong case can be made for prioritizing democratization for the long term societal transformation of the continent.