Open AccessAllocation of Foreign Aid in a Segmented International Context
Author(s) -
S. I. Cohen
Publication year - 1995
Publication title -
pakistan development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.154
H-Index - 26
ISSN - 0030-9729
DOI - 10.30541/v34i4iiipp.987-1000
Subject(s) - per capita , context (archaeology) , developing country , distribution (mathematics) , economics , politics , development aid , public economics , political science , development economics , economic growth , sociology , population , mathematics , geography , law , mathematical analysis , demography , archaeology
Research on the topic of distribution of foreign aid amongrecipients is regaining momentum. This is understandable in the light ofthe knowledge that presently the richest 40 percent of the developingworld receives twice as much aid per capita as the poorest 40 percent[UNDP (1994)], while once upon a time foreign aid was sought toaccomplish exactly the opposite. The distribution of officialdevelopment assistance (ODA) is conventionally studied in terms of twomodels: the ‘recipient needs’ model and the ‘donor interest’ model. Inthe first, foreign aid flows are seen to satisfy the socio-economicneeds of the recipient countries. In the second, national interests ofdonors, whether these are military, political or commercial, are seen todetermine the direction and size of the foreign aid. Empirical studieswere made to ascertain and understand whether, on balance, foreign aidis motivated by recipient need or donor interest. There is one class ofstudies, for example, Mcgillivray (1989), which estimates for donors acompound measure of their allocation bias. The other class of studies,i.e., Maizels and Nissanke (1984) and Grilli and Riess (1992), employsregression analysis to explain allocation of foreign aid byrepresentative variables of recipient need and donorinterest.