Premium
Foreign assistance and emigration: Accounting for the role of non‐transferred aid
Author(s) -
Lanati Mauro,
Thiele Rainer
Publication year - 2020
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.12914
Subject(s) - emigration , odds , dimension (graph theory) , aid effectiveness , economics , development aid , variable (mathematics) , affect (linguistics) , demographic economics , business , developing country , political science , economic growth , computer science , sociology , mathematical analysis , logistic regression , mathematics , machine learning , pure mathematics , law , communication
Since policymakers increasingly regard foreign aid as a means to manage international flows of migrants, it is important to obtain accurate empirical evidence on the complex link between aid and migration. Recent research has shown that the impact of foreign assistance on migrant flows is highly heterogeneous across aid categories. In this paper, we focus on a dimension of heterogeneity that has so far not been considered in the literature, namely whether or not the delivery of foreign aid is associated with a transfer of resources to the recipient country. We show in a first step that non‐transferred aid is quantitatively important, accounting for more than 25% of overall aid given by OECD DAC donors in 2016. Running separate gravity‐type regressions for transferred and non‐transferred aid, we then find that transferred aid has a much stronger (negative) impact on migration than the previously used total aid variable that includes the non‐transferred component. As may be expected, non‐transferred aid itself does not appear to affect migrant flows. A high share of non‐transferred aid would therefore be at odds with the donors’ stated goal of tackling the root causes of migration.