Elite Capture of Foreign Aid: Evidence from Offshore Bank Accounts

Arbeitspapier

Do elites capture foreign aid? This paper documents that aid disbursements to highly aid-dependent countries coincide with sharp increases in bank deposits in offshore financial centers known for bank secrecy and private wealth management, but not in other financial centers. The estimates are not confounded by contemporaneous shocks such as civil conflicts, natural disasters and financial crises, and are robust to instrumenting with predetermined aid commitments. The implied leakage rate is around 7.5% at the sample mean and tends to increase with the ratio of aid to GDP. The findings are consistent with aid capture in the most aid-dependent countries.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CEBI Working Paper Series ; No. 07/20

Classification and Topics

• Classification: Wirtschaft ; Bureaucracy; Administrative Processes in Public Organizations; Corruption ; Foreign Aid ; Capitalist Systems: Political Economy
• Subject: foreign aid ; corruption ; offshore financial centers

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Andersen, Joergen Juel ; Johannesen, Niels ; Rijkers, Bob
• Event: Veröffentlichung
• (who): University of Copenhagen, Department of Economics, Center for Economic Behavior and Inequality (CEBI)
• (where): Copenhagen
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/258921
• Last update: 10.03.2025, 11:44 AM CET