Who's Afraid of Foreign Aid? The Donors' Perspective

By Alberto Chong, M. Gradstein. Social Science Research Network, 2006

242 citations recorded by the source corpus.

Since efforts by industrial countries to increase the amount of foreign aid they provide have been on the rise recently, it is important to understand the determinants involved. This paper examines the factors affecting support for foreign aid among voters in donor countries. The theoretical model, which considers an endogenous determination of official and private aid flows, suggests that government efficiency is an important factor in this regard, and also ties individual income to aid support through the elasticity of substitution. An empirical analysis of individual attitudes, based on the World Values Surveys, reveals that two factors are positively related to an individual`s willingness to support foreign aid: satisfaction with own government performance and individual relative income. Furthermore, when using donor country data, we find that aid is negatively tied to inequality, corruption and taxes. These results are quite consistent with the analytical framework.

Subfields: Development, Safety Research, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/ed2cfe362a9633ba6bc2c06d36aafe9842bda445

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Citations in the corpus

Corruption in Public Service Delivery: Experience from South Asia's Water and Sanitation Sector (2004, background): “…that corruption and rentseeking shrink the range of opportunities available to developing countries as investments become less productive, the cost of capital increases, and private investment, foreign direct investment, and foreign aid all decline (Mauro, 1995; Tanzi & Davoodi, 1997; Wei, 1999).”
Firm Growth and Corruption: Empirical Evidence from Vietnam (2017, methodology): “…in the bribe rate (i.e. bribes paid as a share of revenue).1 Because it is also possible that reduced corruption could cause growth (Mauro, 1995; Wei, 1999a), we instrument for industry-level growth *Corresponding author: Seema Jayachandran, Northwestern University, 2211 Campus Drive, Evanston,…”
Does Economic Growth Reduce Corruption? Theory and Evidence from Vietnam (2013, unknown): “One option involves focused improvements in governance in one region, as suggested by Wei (1999b) and Fisman and Werker (2010), with the idea being that competitive pressure of the type discussed here would lead these improvements to spill over to other regions.”