Aid Study by Alesina & Dollar Cited in "Monitor" Story on Aid Donors' Motivations
June 26, 2003, Washington, DC
by David R. Francis
The article cites a paper by Harvard's Alberto Alesina and David Dollar of the World Bank, titled "Who Gives Foreign Aid to Whom and Why?"
Readers may access the paper in several different ways at the National Bureau of Economic Research -- follow the link on the previous page.
The authors find "considerable evidence that the direction of foreign aid is dictated by political and strategic considerations, much more than by the economic needs and policy performance of the recipients." In addition, they observe that a "[c]olonial past and political alliances are the major determinants of foreign aid. At the margin, however, countries that democratize receive more aid, ceteris paribus. While foreign aid flows respond more to political variables, foreign direct investments are more sensitive to economic incentives, particularly property rights in the receiving countries."
See http://www.csmonitor.com/2003/0626/p14s02-wogi.html for more information.