TY  - JOUR
AU  - Alesina,Alberto
AU  - Dollar,David
TI  - Who Gives Foreign Aid to Whom and Why?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6612
PY  - 1998
Y2  - June 1998
UR  - http://www.nber.org/papers/w6612
L1  - http://www.nber.org/papers/w6612.pdf
N1  - Author contact info:
Alberto F. Alesina
Department of Economics
Harvard University
Littauer Center 210
Cambridge, MA 02138
Tel: 617/495-8388
Fax: 617/495-7730
E-Mail: aalesina@harvard.edu

David Dollar
US Treasury
E-Mail: David.Dollar@do.treas.gov
AB  - This paper studies the pattern of allocation of foreign aid from various donors to receiving countries.  We 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.  Colonial 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.  We also uncover significant differences in the behavior of different donors.
ER  -