Kiel Working Papers, Kiel Institute for World Economics
No 1825:
Why Donors of Foreign Aid Do Not Coordinate: The Role of Competition for Export Markets and Political Support
Andreas Fuchs, Peter Nunnenkamp and Hannes Öhler
Abstract: Development assistance has been criticized for a lack of
coordination between aid donors. This paper argues that competition for
export markets and political support prevents donor countries from closer
coordination of aid activities. To test these hypotheses, we perform logit
and fractional logit estimations for a large sample of recipient countries
and aid activities since the early 1970s. Our empirical results reveal that
export competition between donors is a major impediment to aid
coordination. Tough less conclusive, we also find some evidence that
donors’ competition over political support prevents them from coordinating
aid activities more closely
Keywords: Development aid, donor coordination, trade interests, export similarity, UN voting; (follow links to similar papers)
JEL-Codes: F35,; F42,; F53; (follow links to similar papers)
38 pages, February 2013
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