Competition for Export Markets and the Allocation of Foreign Aid: The Role of Spatial Dependence among Donor Countries

We account for competition for export markets among donor countries of foreign aid by analyzing spatial dependence in aid allocation. Employing sector-specific aid data, we find that the five largest donors react to aid giving by other donors with whom they compete in terms of exporting goods and se...

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Bibliographic Details
Published inWorld development Vol. 64; pp. 350 - 365
Main Authors Barthel, Fabian, Neumayer, Eric, Nunnenkamp, Peter, Selaya, Pablo
Format Journal Article
LanguageEnglish
Published Oxford Elsevier Ltd 01.12.2014
Pergamon Press Inc
Subjects
aid allocation
Competition
Data analysis
Economic assistance
export competition
Exports
Foreign aid
Infrastructure
Markets
Production
Production theory
Resource allocation
sector-specific aid
Spatial analysis
spatial dependence
Studies
aid allocation
export competition
spatial dependence
sector-specific aid
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Summary:We account for competition for export markets among donor countries of foreign aid by analyzing spatial dependence in aid allocation. Employing sector-specific aid data, 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 production sectors. By contrast, evidence for export competition driving aid allocation is lacking for more altruistic donors and for aid in social infrastructure.
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ISSN:0305-750X
1873-5991
DOI:10.1016/j.worlddev.2014.06.009