Journal Article

Determinants of Donor Generosity: A Survey of the Aid Budget Literature

Authors

  • Andreas Fuchs
  • Axel Dreher
  • Peter Nunnenkamp
Publication Date

This article provides a survey of the aid budget literature and examines the determinants of the development aid efforts of 22 DAC members over the 1976-2011 period. In fixed effects regressions, we identify aid inertia, per-capita GDP, the creation of an independent aid agency, colonial history, Russian military capacity, peer effects, terror incidents, aid to CEEC/NIS countries and imports from developing countries as determinants of the ODA-to-GNI ratio. Excluding donor fixed effects, several variables, including colonial history and the aid agency dummy, are no longer significant; the impact of per-capita GDP gets weaker, while donors’ budget deficits decrease aid effort.

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Info

JEL Classification
F35, H81, H87
DOI
10.1016/j.worlddev.2013.09.004

Key Words

  • Aid budget
  • Extreme Bounds Analysis
  • foreign aid
  • Official Development Assistance