Foreign aid: An instrument for fighting communism?

Abstract

In this paper, we test the argument that the sizeable reduction in aggregate aid levels in the 1990s was due to the end of the Cold War. We test two different models using a dynamic econometric specification on a panel of 17 donor countries, spanning the years 1970-97. We find aid to be positively related to military expenditures in the former Eastern Bloc during the Cold War, but not in the 1990s, suggesting that the reductions in aid disbursements are driven by the disappearance of an important motive for aid. We also study the effect on aid allocation, but here we do not find any robust effects of the end of the Cold War.JEL Classification: F35 H5, H56,

Changing aid regimes? U.S. foreign aid from the Cold War to the War on Terror

“…One branch focuses on changes in aid allocations from one era to the next. A number of papers examine how aid allocation changed with the end of the Cold War (e.g., Ball and Johnson, 1996;Berthélemy and Tichit, 2004;Boschini and Olofsgård, 2007;Dunning, 2004;Lai, 2003;Meernik et al, 1998); some recent work explores changes since the start of the War on Terror . The other branch investigates the effects of domestic politics on U.S. aid allocation (e.g., Fleck and Kilby, 2006a;Goldstein and Moss, 2005;Moss, 2007).…”

Foreign aid and global governance: Buying Bretton Woods – the Swiss-bloc case

“…In this dataset, 149 out of a total of 167 countries receive Swiss aid. 14 There are a total of 2,167 country-year observations where Switzerland 13 For the log of aid, I deal with zeros (and hence the undefined log of 0) by adding a small constant (one) so that I can keep the zero-observations (see Ball and Johnson 1996, Fleck and Kilby 2006b, Alesina and Dollar 2000, Bandyopadhyay and Wall 2007, Boschini and Olofsgård 2007, Kuziemko and Werker 2006. Fleck and Kilby (2010: 186, fn3) explain that there is not universal agreement on this.…”

The Proliferation of Developing Country Classifications

“…According to Drezner (2009, p. 68) there are 'powerful reasons to believe that regime complexity will enhance rather than limit the great powers'. Indeed, the impact of geopolitical interests on developmental relationships is a well-established stylised fact at all levels of international development cooperation for the UN, the World Bank, the Asian Development Bank and in bilateral development assistance (see for example, Kilby, 2006;Boschini & Olofsgård, 2007;Dreher, Sturm, & Vreeland, 2009). There is no a priori reason why this would not be the case for the proliferation of categories.…”