Veto players and foreign aid provision

This study investigates how the political institutions of developed economies influence their foreign assistance. Specifically, we argue that the number of effective veto players has a negative effect on the volume of aid provision. To provide foreign assistance, the incumbent government in a donor country must have unanimous support from all effective veto players in policy making. Thus, it has more barriers to overcome when the polity is characterized by many and preference-wise heterogeneous veto players. By examining the official development assistance outflows of 27 OECD countries for the period of 1977–2006, we find empirical patterns that corroborate our argument.     

西班牙的对外发展援助

从受援国到援助国西班牙现代经济真正得以发展只是近几十年的事情。２０世纪５０年代弗朗哥独裁政权为克服国际孤立和经济困难,借助冷战背景,主动与美国靠拢,于１９５３年与美实现关系正常化,继而加入联合国、国际货币基金组织和世界银行,并于１９５５年与艾森豪威尔达成协议,第一次接受美国援助,从１９６０年始接受世界银行贷款。７０年代,由于西班牙工业化进程加快,在继续接受外国援助的同时,逐步开始对外提供援助。具体事件包括:１９７０年成立国际技术合作总局,专门负责接受国外援助和对外提供援助;１９７４年和１９７６年,先后成为非洲…     

Donor ideology and types of foreign aid

We examine how donor government ideology influences the composition of foreign aid flows. We use data for 23 OECD countries over the period 1960–2009 and distinguish between multilateral and bilateral aid, grants and loans, recipient characteristics such as income and political institutions, tied and untied aid, and aid by sector. The results show that leftist governments increased the growth of bilateral grant aid, and more specifically grant aid to least developed and lower middle-income countries. Our findings confirm partisan politics hypotheses because grants are closely analogous to domestic social welfare transfer payments, and poverty and inequality are of greatest concern for less developed recipient countries.     

The political economy of UK foreign aid

In the first part of this paper we provide an overview and comparative assessment of the UK's foreign aid performance over the past 15 years. In the second part, we provide an empirical investigation of the allocation of the UK bilateral aid budget over the period 1970–81. It is concluded that UK political interests were the major determinant of aid allocation during this period with the needs of the less developed countries playing a relatively minor role.     

Measuring absorptive capacity constraints to foreign aid

To assist with progress towards the United Nations Millennium Development Goals (MDGs) in developing countries, the international community is scaling-up foreign aid to record levels. Concurrently, there are concerns that additional aid will not be used effectively due to a problem of absorptive capacity in recipient countries. Empirical studies lend support to these concerns with many finding that there are diminishing returns to foreign aid. This paper reviews the extensive aid effectiveness literature to identify the various dimensions of absorptive capacity. It proceeds by devising a composite index of absorptive capacity for individual recipient countries which can assist policymakers in guiding the allocation of their aid. The relevance of the index is confirmed through its employment in a standard empirical model of aid effectiveness. The paper highlights the developing countries that currently receive high levels of aid relative to their estimated level of absorptive capacity.     

优化主体,健全管理加强援外骨干队伍建设

新中国成立以来,我国一直非常重视与其他发展中国家的经济合作关系,向一些国家提供了力所能及的经济援助,对促进受援国经济社会的发展起到了积极的作用.     

Cost-effectiveness of foreign aid programs in the baltics

After the upheavals in Central and Eastern Europe in the late 1980s and early 1990s, the Western world has given considerable aid to the fledgling democracies. In this paper we draw a summary from Baltic experience in the fields of educational programs, scientific and environmental programs, and commercial projects in banking, taxation, and energy. We analyze the motivation and identify different possible effects of foreign aid. We signal possible inefficiencies arising from the lack of coordination of foreign aid, deal with possible waste as being a form of loss in cost-effectiveness, and address the policies followed by aid-providing agencies. Finally, we suggest ways that can help to achieve cost-effectiveness by assisting the donor and recipient in maximizing benefits gained and possibly reducing costs.     

Microeconomic consequences and macroeconomic causes of foreign direct investment in southern African economies

The authors use a new data set on firms in 13 countries of the Southern African Development Community (SADC) and comparators from other regions to identify the benefits and determinants of FDI in this region. Foreign Direct Investment (FDI) has facilitated local development in the SADC. Foreign-owned firms perform better than domestic firms, are larger, and locate in richer and better-governed countries and in countries with more competitive financial intermediaries. They are also more likely to export than domestic firms and evidence suggests that they might have positive spillover effects on domestic firms. Based on a standard empirical model, the SADC is attracting the inward FDI per capita that the region's level of income would predict. But this means that there are less capital inflows per capita to the region than there are to wealthier parts of the developing world. Moreover, the SADC is attracting less FDI than comparators for reasons that are possibly more fundamental than current income, namely, countries’ past growth record, demographic structure and the quality of physical infrastructure. Interestingly, inward FDI is less sensitive to variation in income within the SADC than in other parts of the world, but is more responsive to changes in country's openness to trade.     

What determines foreign aid? The donors' perspective

This paper examines the factors affecting the support for foreign aid among voters in donor countries. A simple theoretical model, which considers an endogenous determination of official and private aid flows, relates individual income to aid support and also suggests that government efficiency is an important factor in this regard. The empirical analysis of individual attitudes, based on the World Values Surveys, reveals that satisfaction with own government performance and individual relative income are positively related to the willingness to provide foreign aid. Furthermore, using actual donor country data we find that aid is adversely affected by own government inefficiency.     

On the provision of official and private foreign aid

The provision of official relative to private foreign aid varies considerably between donor countries. We explain the variations in terms of country size, household composition, income distribution, and the government's ability to commit to aid, and derive inter alia the results: (1) official aid crowds out private aid, (2) total aid and official aid collected from each household are lower in more populous countries, (3) total aid is lower if (i) the distribution of income favors the more altruistic households, and (ii) the government can credibly commit to a certain level of aid. Evidences suggest that the theoretical results can explain stylized facts.     

Risk sharing role of foreign aid in developing countries

The effects of foreign aid on economic growth have been extensively investigated over the past 40 years. However, even though foreign aid can be a significant source of insurance against domestic output shocks for developing countries, its risk-sharing role has not been well explored. Using a sample of 22 developing countries over the period 2003–2013, we estimate the degree of income smoothing generated by foreign aid serving as an effective channel of international income smoothing. In particular, for the period 2003–2008, we estimate that foreign aid offset about 4% of the domestic output shocks. Furthermore, we investigate the determinants of the extent of risk sharing via foreign aid, recognizing the diversification of the originating countries as a key factor. Surprisingly, humanitarian aid seems to have a negative effect, which might be explained by its predominant role in the short run.     

The dynamic implications of foreign aid and its variability

The paper examines the effects of aid and its volatility on consumption, investment, and the structure of production in the context of an intertemporal two-sector general equilibrium model, calibrated using data for aid-dependent countries in Africa. A permanent flow of aid mainly finances consumption rather than investment—consistent with the historical failure of aid inflows to translate into sustained growth. Large aid flows are associated with higher real exchange rates and smaller tradable sectors because aid is a substitute for tradable consumption. Aid volatility results in substantial welfare losses, providing a motivation for recent discussions of aid architecture stressing the need for greater predictability of aid. These results are also consistent with evidence from cross-country regressions of manufactured exports, presented later in the paper.     

The transmission mechanism of monetary policy: Microeconomic aspects of macroeconomic issues

The article analyzes the transmission mechanism of monetary policy in light of microeconomic theory. We address the influence of microeconomic factors on the transmission of monetary policy while taking into account the contributions of conventional price formation and competition theory and heterodox microeconomic theories, including work inspired by the post Keynesians. We found a multiplicity of results regarding changes in price levels and inflation derived from shifts in demand and costs. These results challenge the conventional view, which postulates a single behavior in the circuit from changes in interest rates to demand, prices, and inflation. We conclude that microeconomic and macroeconomic aspects should be integrated to properly explain monetary policy and analyze its effects and transmission mechanism.     

Corruption,foreign aid and welfare to the poor

This paper investigates the impact of foreign aid and corruption on the welfare of different classes in an economy that receives aid and uses it to finance a public good. We use a general equilibrium model that consists of three goods and three income classes to derive our results. The most important result we obtain is to show that under certain conditions, aid and corruption immiserize the poor.     

中国对外援助机制:现状和趋势

近年来,中国的对外援助发展很快,受到了国际社会的广泛关注,但是,在研究中国对外援助问题的时候,西方的学者对中国的对外援助机制不甚了解,对中国对外援助管理机构、管理体系都认识不够,甚至误解很深.本文试图对中国的对外援助机制的现状和问题做一个总体的分析,包括中国对外援助的原则、政策,主要援助机构和职责,对外援助体系的构成等,并试图探讨中国对外援助机制的未来发展趋势.     

The macroeconomic impact of foreign labour influx into the industrialized nation state and the complementary policies

This paper makes a numerical assessment on the macroeconomic impact of foreign labor influx into the industrialized nation state allowing free trade in goods but imposing an immigration quota on labor, and then explores the complementary policies for the impact of foreign labor influx. One of the main findings is that immigration itself brings welfare gains only if prices are flexible, but a skill-biased intake policy can bring a much larger welfare gain. The complementary policy options to boost welfare gains by immigration increase are monetary expansion, adopting foreign components more, and influencing foreign demand for intermediate goods indirectly by inviting foreign direct investment. For these policies to cope, the destination country should try to correct the market structure so that prices can be flexible.     

The effect of foreign aid on corruption: A quantile regression approach

This paper investigates the effect of foreign aid on corruption using a quantile regression method. We show that foreign aid generally reduces corruption, and its reduction effect is greater in less corrupt countries. Moreover, this effect is different by different donor countries.     

The effects of remittances,foreign direct investment,and foreign aid on economic growth: An empirical analysis

The Sustainable Development Goals have refocused attention on ways of providing external finance to support development. Because they have different motivations and work through different modalities, remittances, foreign direct investment (FDI), and official development assistance may be expected to have different consequences for economic growth. Existing empirical evidence suggests that both positive and negative effects are associated with each source of finance. We use both a dynamic panel model and a fixed effects model to calculate the overall effects of each source of finance in isolation and taken together over the period 1976–2015. We include a range of control variables to allow for other potential influences on economic growth. We disaggregate the effects across geographical regions and income levels to test for heterogeneity. We also undertake a series of robustness checks. Our results suggest that FDI has a significant positive effect on economic growth, whereas remittances have a significant and negative effect. The effect of foreign aid is more ambiguous but is usually insignificant. The article offers an interpretation of the results drawing on ideas from the relevant theory.     

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.     

Exploring the failure of foreign aid: The role of incentives and information

The stated purpose of foreign aid is to promote economic and human development. Recently, the ability of foreign aid to achieve its goals is called into question. Widespread conceptual and empirical literature suggests that foreign aid is ineffective. This paper explores the failure of foreign aid relying on the role of both incentives and information. The success of aid depends on incentives faced by all parties in donor and recipient countries. In addition, both donors and recipients must obtain the necessary information to actually target and achieve desired goals. This analysis provides a double-edged sword to explain why foreign aid fails to achieve development goals.