Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/83984
Year of Publication: 
2013
Series/Report no.: 
Kiel Working Paper No. 1875
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
Abstract: 
We account for the competition for export markets among the donor countries of foreign aid by analyzing spatial dependence in aid allocation. We employ sector-specific aid data, distinguishing between first and second stage decisions on the selection of recipient countries and the amount of aid allocated to selected recipients. We find that the five largest donors react to aid giving by other donors with whom they compete in terms of exporting goods and services to a specific recipient country at both stages of their allocation of aid for economic infrastructure and productive sectors. By contrast, evidence for export competition driving aid allocation is lacking for more altruistic donors and for aid in social infrastructure.
Subjects: 
aid allocation
sector-specific aid
export competition
spatial dependence
JEL: 
F35
Document Type: 
Working Paper

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