Competition for export markets and the allocation of foreign aid: The role of spatial dependence among donor countries

TY - JOUR

T1 - Competition for export markets and the allocation of foreign aid

T2 - The role of spatial dependence among donor countries

AU - Barthel, Fabian

AU - Neumayer, Eric

AU - Nunnenkamp, Peter

AU - Selaya, Pablo

PY - 2014/12

Y1 - 2014/12

N2 - 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.

AB - 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.

KW - Aid allocation

KW - Export competition

KW - Sector-specific aid

KW - Spatial dependence

U2 - 10.1016/j.worlddev.2014.06.009

DO - 10.1016/j.worlddev.2014.06.009

M3 - Journal article

AN - SCOPUS:84904301539

SN - 0305-750X

VL - 64

SP - 350

EP - 365

JO - World Development

JF - World Development

ER -