TITLE:
Determinants of Large Shifts in Official Development Aid Allocation by Major Countries
AUTHORS:
Njato Rabehajaina, Kodjovi Assoe, Komlan Sedzro
KEYWORDS:
Aid Allocation, Official Development Assistance, China, France, United Kingdom, United States, Recipient Countries
JOURNAL NAME:
Theoretical Economics Letters,
Vol.12 No.1,
February
8,
2022
ABSTRACT: This study provides a comparative analysis of the
main determinants of large shifts in aid allocation by major donors, namely
China, France, the United Kingdom, and the United States. In contrast to
continuing assistance, significant year-over-year variation of allocated aid to
a given recipient is considered a new and deliberate decision by the donors.
Using a version of quantile regression to account for heterogeneity in the
characteristics of aid recipients, we show that significant differences exist
in the aid allocation strategies of the major donors. There is no
conditionality attached to Chinese aid, while self-economic interests and
corruption levels at home and in the recipient countries determine aid
allocated by France and the U.K. to their former colonies. In addition,
recipient needs affect aid from France, the U.K., and the U.S. Over the
2000-2014 period, there is no significant change in the determinants of aid
allocation by China in response to various criticisms of its approach.
Confronted with the growing influence of emerging donors such as China, the
three major traditional donors seem to adjust their aid allocation policy
towards their own economic interests.