Kiel Working Papers, Kiel Institute for World Economics
No 1414:
Does Corporate Aid Really Help Fighting Worldwide Poverty? A Case Study of Nestlé's Aid Allocation
Laura Metzger, Peter Nunnenkamp and Toman Omar Mahmoud
Abstract: Having passed the “market test”, private aid is claimed by
its proponents to be better-targeted than official development assistance
(ODA). But empirical evidence is largely lacking. We contribute to closing
this gap by performing a case study of Nestlé, one of the frontrunners
among multinational corporations being actively involved in the alleviation
of poverty. The targeting of Nestlé’s aid is compared to that of Swiss ODA
and NGO aid, testing for both altruistic and selfish aid motivations. It
turns out that Nestlé favored more democratic but also more corrupt
recipient countries. Moreover, Nestlé’s aid clearly lacks focus in terms of
targeting poor countries, which appears to be the downside of the strong
link between commercial presence and aid. By contrast, Swiss ODA and NGO
aid is more altruistic and poverty-oriented
Keywords: aid allocation, private aid, corporate social responsibility, official development assistance, NGO aid, Millennium Development Goals, Nestlé; (follow links to similar papers)
JEL-Codes: F35,; M14; (follow links to similar papers)
35 pages, April 2008
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