•We study how aid affects infant mortality at the subnational level by matching AidData and DHS data for Nigeria.•Mother fixed-effects enable us to control for a vast number of unobserved factors ...that may otherwise bias the relationship.•We find that active aid projects reduce infant mortality, especially for less privileged groups.
While there is a vast literature studying the effects of official development aid (ODA) on economic growth, there are far fewer comparative studies addressing how aid affects health outcomes. Furthermore, while much attention has been paid to country-level effects of aid, there is a clear knowledge gap in the literature when it comes to systematic studies of aid effectiveness below the country-level. Addressing this gap, we undertake what we believe is the first systematic attempt to study how ODA affects infant mortality at the subnational level. We match new geographic aid data from the AidData on the precise location, type, and time frame of bilateral and multilateral aid projects in Nigeria with available georeferenced survey data from five Nigerian Demographic and Health Surveys. Using quasi-experimental approaches, with mother fixed-effects, we are able to control for a vast number of unobserved factors that may otherwise be spuriously correlated with both infant mortality and ODA. The results indicate very clearly that geographical proximity to active aid projects reduces infant mortality. Moreover, aid contributes to reduce systematic inter-group, or horizontal, inequalities in a setting where such differences loom large. In particular, we find that aid more effectively reduces infant mortality in less privileged groups like children of Muslim women, and children living in rural, and in Muslim-dominated areas. Finally, there is evidence that aid projects are established in areas that on average have lower infant mortality than non-aid locations, suggesting that there are biases resulting in aid not necessarily reaching those populations in greatest need.
Aid donors pursue a strategy of targeted development with regard to recipient states. The determinants of aid allocation have shifted significantly. Industrialized states are increasingly unable to ...insulate themselves from spillovers caused by underdevelopment abroad. Donors attempt to use aid to decrease these spillovers, targeting developing countries where the effects on the donor are anticipated to be large. Once a recipient is chosen, concern for recipient government capacity guides the composition of aid. Empirical analysis of aid allocation from 1973 to 2012 demonstrates that, while explanations based on security and economic ties to the donor explain allocation well in the Cold War, the post-2001 period is best understood by incorporating a role for targeted development. This framework helps synthesize various findings in the aid allocation literature and has important implications for studying aid effectiveness.
We investigate whether foreign aid affects refugee flows from recipient countries. Combining refugee data on 141 origin countries over the 1976–2013 period with bilateral Official Development ...Assistance data, we estimate the causal effects of a country’s aid receipts on both total refugee flows to the world and flows to donor countries. The interaction of donor-government fractionalization and a recipient country’s probability of receiving aid provides a powerful and excludable instrumental variable (IV) when we control for country- and time-fixed effects that capture the levels of the interacted variables. Though our IV results suggest that aid induces recipient governments to encourage the return of their citizens, we find no evidence that aid reduces worldwide refugee outflows or flows to donor countries in the short term. However, we observe long-run effects after four three-year periods, which appear to be driven by lagged positive effects of aid on growth.
•The COVID-19 pandemic is creating a global food security crisis.•Need for international food assistance is rising, while supply is being constrained.•Donor countries may cut foreign aid budgets ...during economic recessions.•We propose policy responses to keep food assistance flowing, without increasing aid budgets.•Proposals include prioritizing humanitarian aid spending, exempting food assistance from trade barriers, and untying aid.
The COVID-19 pandemic is increasing the need for international food assistance, and disrupting the supply and delivery of food assistance. A series of unprecedented shocks is straining the capacity of food assistance organizations to reach vulnerable populations. We discuss how the COVID-19 pandemic is affecting the demand and the supply of international food assistance, and we propose three policy changes that can keep food flowing to those in need. First, donor countries can prioritize humanitarian spending in aid-allocation decisions. Second, governments can exempt food assistance from trade barriers that impede procurement (export restrictions) and delivery (import tariffs). Third, donor countries can allow flexibility for implementing agencies by untying food assistance from domestic procurement and shipping restrictions. All of these proposals are regulatory changes that can be made without requiring increased spending. These options are particularly relevant now because donor-country governments are entering economic recessions, and foreign aid budgets will be constrained.
There is currently much debate about the effectiveness of foreign aid and about what kind of projects can engender economic development. There is skepticism about the ability of econometric analysis ...to resolve these issues or of development agencies to learn from their own experience. In response, there is increasing use in development economics of randomized controlled trials (RCTs) to accumulate credible knowledge of what works, without overreliance on questionable theory or statistical methods. When RCTs are not possible, the proponents of these methods advocate quasirandomization through instrumental variable (IV) techniques or natural experiments. I argue that many of these applications are unlikely to recover quantities that are useful for policy or understanding: two key issues are the misunderstanding of exogeneity and the handling of heterogeneity. I illustrate from the literature on aid and growth. Actual randomization faces similar problems as does quasi-randomization, notwithstanding rhetoric to the contrary. I argue that experiments have no special ability to produce more credible knowledge than other methods, and that actual experiments are frequently subject to practical problems that undermine any claims to statistical or epistemic superiority. I illustrate using prominent experiments in development and elsewhere. As with IV methods, RCT-based evaluation of projects, without guidance from an understanding of underlying mechanisms, is unlikely to lead to scientific progress in the understanding of economic development. I welcome recent trends in development experimentation away from the evaluation of projects and toward the evaluation of theoretical mechanisms.
•We revisit the aid-migration link using a gravity model of international migration.•We find a negative relationship between the total aid received and emigration rates.•We conclude that aid mainly ...affects migration through improved public services.•This is in line with the reorientation of aid towards social sectors under the MDGs.
While policymakers hope to stem migration flows by giving foreign aid, existing empirical evidence points in the opposite direction: by loosening budget constraints, aid tends to encourage people to emigrate. In this paper, we revisit the aid-migration link using a substantially extended and adjusted econometric approach based on a gravity model of international migration. In contrast to the previous literature, we obtain evidence of a negative relationship between the total aid a country receives and emigration rates. This even holds for the poorer part of recipient countries, which suggests that the budgetary constraint channel does not play a significant role in shaping migration decisions. The most plausible explanation for these contrasting results is that, unlike in previous studies, we use migrant flows rather than migrant stocks as the dependent variable. In substantive terms, the limited importance of the budgetary constraint channel might reflect that positive welfare effects of foreign aid tend to manifest themselves in improved public services for the poor rather than higher incomes, which is in line with the reorientation of foreign aid towards social sectors under the Millennium Development Goals.
Recent empirical evidence suggests that Chinese development finance may be particularly prone to elite capture and patronage spending. If aid ends up in the pockets of political elites and their ...ethno-regional networks, this may exacerbate ethnic grievances and contribute to ethnic mobilization. In this research note I examine whether Chinese development projects make local ethnic identities more salient in African partner countries. A new geo-referenced data set on the subnational allocation of Chinese development finance projects to Africa is geographically matched with survey data for 50,520 respondents from eleven African countries. The identification strategy compares sites where a Chinese project was under implementation at the time of the interview to sites where a Chinese project will appear subsequently. The empirical results suggest that living near an ongoing Chinese project makes ethnic identities more salient. There is no indication of an equivalent pattern when considering other donors’ development projects.
There has been a significant rise in the share of women legislators in Africa. What makes this fact puzzling is that it cannot be attributed to an African electorate that values gender equality and ...having women in political leadership positions. In stark contrast to this, gender equality and women's empowerment have successively moved up in the priority list of the international donor community over the last two decades. This raises the question of whether there is a relationship between women legislators in Africa and foreign-aid allocations. This study finds a strong and statistically robust relationship: an increase in the share of women legislators from 15 to 20 percent is associated with an increase of about 4 percent in aid conditional on current levels of aid. Additionally, the study finds that democratic countries receive more aid but does not find an interaction effect between democracy and the share of women legislators, which suggests that donors do not tailor their gender-selective aid towards more democratic countries. The results provide evidence in support of aid selectivity for policies that improve gender equality in aid-recipient countries in Sub-Saharan Africa.
The curse of aid Djankov, Simeon; Montalvo, Jose G.; Reynal-Querol, Marta
Journal of economic growth (Boston, Mass.),
09/2008, Letnik:
13, Številka:
3
Journal Article
Recenzirano
Foreign aid provides a windfall of resources to recipient countries and may result in the same rent seeking behavior as documented in the "curse of natural resources" literature. In this paper we ...discuss this effect and document its magnitude. Using panel data for 108 recipient countries in the period 1960-1999, we find that foreign aid has a negative impact on institutions. In particular, if the foreign aid over GDP that a country receives over a period of 5 years reaches the 75th percentile in the sample, then a 10-point index of democracy is reduced between 0.5 and almost one point, a large effect. For comparison, we also measure the effect of oil rents on political institutions. We find that aid is a bigger curse than oil.
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