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Giving and Receiving Aid: Does Conflict Count?

This study delves into the intricate motivations behind bilateral aid allocation, examining how donor interests—ranging from altruistic goals to geopolitical strategies—affect aid distribution. It highlights the role of conflict proximity and intensity in shaping how aid is granted. By analyzing data from 20 donors and 122 recipients over 37 years, the research reveals differing patterns among donors, such as Scandinavian altruism versus US geopolitical considerations. Results suggest that conflict influences not only the selection of aid recipients but also the amount granted, leading to a complex landscape of international aid dynamics.

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Giving and Receiving Aid: Does Conflict Count?

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  1. Giving and Receiving Aid: Does Conflict Count? Eliana Balla Gina Yannitell Reinhardt

  2. How do donor interests condition bilateral aid allocation? • Altruistic interests • Aid is a development tool; poor countries need money • Literacy rates, infant mortality rates, GDP per capita • Strategic interests • Aid is a policy tool; we use it to establish partnerships and encourage cooperation • Proximity to Communist countries, human rights abuses, UNGA votes, military expenditures, democracy indicators, treaty memberships

  3. Different donors exhibit different patterns • Scandinavian donors are altruistic • France gives to former colonies • Japan gives to trading partners • US gives according to geopolitical interests • Problem? • All donors are not put to the same test • Solution? • Examine geographic proximity to conflict • Why? • Aid effectiveness, conflict repercussions

  4. Conflict and allocation

  5. Conflict and allocation

  6. Conflict and allocation

  7. Data, Hypotheses, and Estimation • Unit of Analysis: dyad-year (20 donors, 122 recipients, 37 years) • Conflict • Proximity (0-3); Correlates of War & PRIO • Based on whether a recipient contains, borders, or shares a region with conflict • Intensity (0-3); PRIO Armed Conflict Data • Based on number of battle-related deaths per year

  8. Heckman selection model (MLE) • Gate-keeping (Selection stage: who gets aid?) • GDP per capita, life expectancy • Bilateral trade patterns, past colonial ties, Polity IV, UNGA voting history, FDI flows • Conflict proximity and intensity • Level-setting (Outcome stage: how much aid do they get?) • GDP per capita, life expectancy, population • Recent UNGA correlations • Conflict proximity and intensity

  9. Effects of Conflict Proximity on Aid • Internal and border proximity to conflict increases the possibility of selection • Austria, Belgium, Finland, France, Germany, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Sweden, Switzerland, US • Regional proximity to conflict increases the possibility of selection • Belgium, Canada, France, Germany, Ireland, Italy, Japan, New Zealand, Sweden, USSR

  10. Effect of Conflict Intensity on Aid • Reduce aid to recipients bordering more intense conflicts • Spain, Canada, New Zealand, UK • Increase aid to countries bordering more intense conflicts • Denmark, Finland, Netherlands, Norway, US, Japan, Germany, Ireland

  11. Changes from low to moderate intensity yield: • For internal conflicts: • $6.59 increase per capita in US aid (47%) • $1.79 increase per capita in Soviet aid (11%) • $.76 decrease per capita in French aid (7.5%) • For border conflicts: • $2.46 increase per capita in US aid (17.4%) • $3.12 decrease per capita in UK aid (76%)

  12. Other variables? • UNGA voting history • Positive effects on aid for Austria, Finland, France, Germany, Japan • Negative effects on aid for Netherlands, Spain, Ireland • Recent UNGA votes • $54.50 increase per capita in US aid (400%) • $.42 increase per capita in German aid (13%) • Denmark and Finland “reward” votes with aid

  13. Humanitarian Indicators • Path dependency is evident for all donors • Population • Negative and significant for all donors • GDP • Negative and significant for all donors • Life expectancy • Significant for all donors

  14. Political and Economic Variables • PolityIV • Relevant for 9 donors: Denmark, Ireland, Japan, Netherlands, New Zealand, Norway, Portugal, Sweden, Spain • Not significant for US, UK, France • Bilateral trade • Positive effects for: Canada, Denmark, Finland, France, Ireland, New Zealand, Portugal, Sweden, Spain, USSR • Colonial ties • Positive effects for France, Spain, Portugal

  15. Summary – Gate-Keeping • Funnel aid to nations bordering or containing conflict • Finland, Norway, and Sweden, plus Austria, Belgium, France, Germany, Ireland, Italy, Netherlands, New Zealand, Switzerland, and the US • Funnel aid away from intense conflicts • Belgium, Canada, Denmark, France, Ireland, Japan, Switzerland, and Spain

  16. Summary – Level-setting • Decrease aid to border and internal conflicts • Belgium, Canada, France, New Zealand, Portugal, Switzerland, Spain, and the UK • Increase aid to internal or border conflicts • US, USSR, Denmark, Finland, Germany, Ireland, Japan, the Netherlands, and Norway • Increase aid to border conflicts while decreasing aid to internal conflicts • Denmark, Ireland, Japan • No level-setting based on conflict • Sweden, Austria

  17. Summary - Intensity • Reduce aid to countries bordering intense conflicts • Spain joins Canada, New Zealand, and UK • Increase aid to countries bordering intense conflicts • Denmark, Finland, the Netherlands, Norway US, Japan, Germany, and Ireland

  18. Conclusions • Every donor conditions aid on conflict at some point in their allocation. • Donor motivations are more complex than previously indicated. • Donor types can no longer be assumed as they were previously, and must be broken down more carefully. • Geographic proximity and intensity of conflict are important determinants of allocation.

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