Aid supplies over time: Accounting for heterogeneity, trends, and dynamics

Arbeitspapier

The recent financial crisis has rekindled interest in the foreign aid supply behaviour of bilateral donors. Using the latest data covering the period 1960-2009, this paper examines how such behaviour is related to domestic factors. Based on a simple empirical model, a distinction is made between long-run supply trends and short-run dynamics, which motivates use of error correction methods. Panel econometric techniques are employed that are consistent in the presence of parameter heterogeneity and cross-section dependence. Results support the error correction framework, but point to very substantial heterogeneity between countries. There is also good evidence that donor behaviour continues to evolve over time. As such, past trends in aid supplies are unlikely to provide a good guide to those of the future.

Object Details

• ISBN: 978-92-9230-367-9
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WIDER Working Paper ; No. 2011/04

Classification and Topics

• Classification: Wirtschaft ; Foreign Aid ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models ; International Policy Coordination and Transmission
• Subject: foreign aid ; bilateral donors ; panel data ; error correction ; heterogeneity

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Jones, Sam
• Event: Veröffentlichung
• (who): The United Nations University World Institute for Development Economics Research (UNU-WIDER)
• (where): Helsinki
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/54129
• Last update: 10.03.2025, 11:42 AM CET