Are ‘New’ Donors Different? Comparing the Allocation of Bilateral Aid Between nonDAC and DAC Donor Countries

Abstract

Major DAC donors are widely criticized for weak targeting of aid, selfish aid motives and insufficient coordination. The emergence of an increasing number of new donors may further complicate the coordination of international aid efforts. On the other hand, new donors (many of which were aid recipients until recently) may have competitive advantages in allocating aid according to need and merit. Project-level data on aid by new donors, as collected by the PLAID initiative, allow for empirical analyses comparing the allocation behavior of new versus old donors. We employ Probit and Tobit models and test for significant differences in the distribution of aid by new and old donors across recipient countries. We find that new donors (i) focus on closer neighbors, (ii) care less for recipient need, (iii) exhibit a weaker bias towards badly governed countries, (iv) respond to disasters,

Do authoritarian regimes receive more Chinese development finance than democratic ones? Empirical evidence for Africa

“…Fuchs and Vadlamannati (2013) empirically assess India's foreign aid motives for a set of 125 countries over the [2008][2009][2010] period. A study by Dreher, Nunnenkamp and Thiele (2011) compares the allocation of aid between DAC and non-DAC donors. Bermeo (2011) compares differences in preferences between democratic donors and authoritarian donors (such as Kuwait, Saudi Arabia or United Arab Emirates).…”

“…Both Dreher et al (2011) and Bermeo (2011) were among the first studies that systematically compared (i) the aid allocation of non-DAC donors versus DAC donor countries and (ii) the aid allocation of democratic versus autocratic donors. Dreher et al (2011) find that, even though non-DAC and DAC donors behave similarly in several respects, new donors care, on average, less for recipient need than old donors.…”

“…Both Dreher et al (2011) and Bermeo (2011) were among the first studies that systematically compared (i) the aid allocation of non-DAC donors versus DAC donor countries and (ii) the aid allocation of democratic versus autocratic donors. Dreher et al (2011) find that, even though non-DAC and DAC donors behave similarly in several respects, new donors care, on average, less for recipient need than old donors. Bermeo's (2011) study suggests that authoritarian donors tend to disproportionately favour authoritarian recipients: "they give to more authoritarian recipients and give more on average to authoritarian recipients than to democratic recipients" (p. 2024).…”

Comparison of Aid Allocation Patterns of Two Emerging Donors: Korea and Greece

“…Last but not least, Korea's regional interest in Asia was also confirmed in several studies (e.g. Dreher et al, 2011Dreher et al, , 1960Koo & Kim, 2011, p. 181;Sohn et al, 2011, p. 60). However, this study will go one step further to verify if geographical location still matters in different income groups.…”

“…Not only does Korea have a bifurcated system, but when compared to other emerging donors, it is the most proliferated donor with most number of recipients (Dreher et al, 2011(Dreher et al, , 1953. However, a critical problem that can arise from having a bifurcated system is that it hinders the effective aid allocation and thus may continue incoherent aid practices.…”