The notion that foreign aid is fully fungible and so is spent, at the margin, in the same manner as any other funds that the recipient governments control seems to be widespread. For example, the World Bank (1998: 80) argues that “donors should take it for granted that their financing is fungible because that is reality.” Our results, based on a game-theoretic model, challenge this commonly held view. We conclude that some donors seem to influence the spending priorities of recipients. Perhaps surprisingly, bilateral donors appear to be more potent in this sense than multilateral ones. However, this potency does not always result in greater priority being attached to the social sectors. In fact, the involvement of the large bilateral donors tends to reduce the ratios of health and education spending to GDP. As the targeted aid of the bilaterals is rarely a distinct determinant of the budget share of social spending, their impact may in general be working through indirect channels, for example, by alleviating foreign exchange constraints. However, the “soft” bilateral donors - the donors that spend the largest fraction of their national income on foreign aid - seem to have considerable success in increasing spending in the social sectors using earmarked funds. This conclusion is based on the finding that an increase in targeted aid from these donors has a much stronger effect on health and educational spending in most recipient countries than an identical increase in domestic public revenues. There are two possible interpretations of this result. One is that it is due to the concentration of these donors’ development assistance in the poorest
35 Ideally, we would have liked to use more disaggregated categories of health and education spending, but the GFS-database does not contain this kind of data for a large enough number of recipient country-years.
recipient countries. A second possible interpretation is that these donors allocate more aid to many specific projects in the social sectors than the recipients would have allocated by themselves and that this shows up in the aggregate data. We cannot distinguish directly between these two competing interpretations, but the fact that aid from the IDA, which is also targeted at the poorest countries, does not generate similar results favours the latter hypothesis. Future research on aid and public spending should investigate the different modes of governance that donors use in their interactions with recipients as a step towards uncovering the micro-level determinants of the degree of donor influence.
References
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Journal of Economic Growth 5: 33-63.
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Burnside, C. and D. Dollar (2000): “Aid, Policies, and Growth.” American Economic Review 90: 847-868.
Cassen, R. et al: Does Aid Work? 2nd edition, Clarendon Press, 1994.
Culpeper, R.: Titans or Behemoths? Intermediate Technology Publications, 1997.
Devarajan, S., M.J. Miller, and E.V. Swanson (2002): Goals for Development:
History, Prospects and Costs. World Bank Policy Research Working Paper 2819.
Devarajan, S., A.S. Rajkumar, and V. Swaroop (1999): What Does Aid to Africa Finance? World Bank Policy Research Working Paper 2092.
Feyzioglu, T., Swaroop, V. and Zhu, M. (1998). “A Panel Data Analysis of the Fungibility of Foreign Aid.” The World Bank Economic Review 12: 29-58.
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Jepma, C.J. (1991): The Tying of Aid. Development Centre Studies, OECD.
Mosley, P., J. Harrigan and J. Toye (1991): Aid and Power. The World Bank and Policy-Based Lending. Routledge.
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Economic Journal 100: 188-194.
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Table 1: Descriptive statistics
Variable Sample countries mean*, median
Other countries mean*, median
Explanation (unit)
Source healtgfs (h): 1.95, 1.59
(1.46) N=94
2.97, 2.28 (2.23) N=26
Governmental expenditures, health (% in GDP)
GFS-IMF educagfs (e): 3.59, 3.55
(1.81) N=94
2.95, 3.13 (1.76) N=25
Governmental expenditures, education (% in GDP)
GFS-IMF expengfs (I): 28.48, 28.33
(11.48) N=94
33.34, 35.26 (10.69) N=30
Governmental expenditure (% in GDP)
GFS-IMF aid1 (A): 4.01, 1.49
(5.26) N=94
5.41, 3.04 (6.54) N=74
Aid commitments (% in GDP)
CRS-DAC-OECD aid2 (A): 2.16, 0.66
(3.74) N=89
1.00, 0.48 (1.50) N=27
Aid received (% in GDP)
GFS-IMF netexp1 (G): 24.60, 26.13
(13.96) N=94
29.14, 31.30 (6.53) N= 7
Governmental expenditure, net aid commitments (% in GDP)
Diff: I – Aid1 netexp2 (G): 26.01, 26.95
(11.07) N=89
32.61, 34.06 (9.46) N=27
Governmental expenditure, net aid (% in GDP)
Diff: I – Aid2 aidmulti 1.41, 0.34
(2.05) N=94
1.85, 0.79 (2.60) N=74
Multilateral aid commitments (% in GDP)
CRS-DAC-OECD aidbi 2.60, 1.08
(3.42) N=94
3.56, 2.29 (4.45) N=74
Bilateral aid commitments (% in GDP)
CRS-DAC-OECD aidhealth 0.19, 0.05
(0.30) N=94
0.25, 0.15 (0.34) N=74
Total aid committed to the health sector (% in GDP)
CRS-DAC-OECD aideduc 0.26, 0.08
(0.20) N=94
0.46, 0.11 (1.04) N=74
Total aid committed to the education sector (% in GDP)
CRS-DAC-OECD gdpcap: 2883.19, 1536.33
(3478.14) N=94
3035.65, 942.67 (5470.38) N=61
GDP per capita in constant 1995 USD ($1000)
WDI ruralpop: 53.34, 53.26
(22.08) N=94
58.44, 63.68 (21.99) N=73
Rural population (%)
WDI arabla: 0.30, 0.23
(0.28) N=94
0.22, 0.18 (0.17) N=69
Cropped land per capita (100 ha)
WDI popdens: 155.01, 49.57
(496.54) N=94
372.91, 49.78 (1949.76) N=72
Population density (10/km2)
WDI autoc: 3.97, 4.05
(1.53) N=94
4.80, 5.29 (1.70) N=69
Index for political rights
(1 is most democratic, 7 is the least)
Freedom house
* Unweighted mean of country means (standard deviation for the reported mean in parenthesis).
Table 2: Fixed-effect regressions for public spending on health
1 2 3 4 5 6 7 8 9 10 11
Indepvars:
Other expenditure
Aid dis-bursements
Low income Africa Asia Latin America
expenditure 0.970*** 0.030***
(% in GDP) (0.003) (0.003)
domestic 0.048*** 0.027*** 0.065*** 0.041*** 0.058*** 0.054*** 0.043*** 0.047*** 0.055***
(% in GDP) (0.004) (0.003) (0.006) (0.003) (0.008) (0.005) (0.004) (0.006) (0.007) aid 0.030*** 0.043*** 0.044*** 0.052*** 0.080*** 0.060*** 0.037*** 0.024*** 0.103***
(% in GDP) (0.011) (0.006) (0.010) (0.006) (0.015) (0.006) (0.006) (0.009) (0.012)
domestic -0.0004***
(squared) (0.0000)
aid 0.0006***
(squared) (0.0002)
gdpcap 0.044* 0.047** -1.186*** 0.198 -0.009 0.051 ($1000) (0.023) (0.023) (0.252) (0.122) (0.46) (0.089)
popdens -0.003 -0.003 -0.025* -0.041** 0.000 0.250***
(10/km-sq) (0.002) (0.002) (0.015) (0.018) (0.004) (0.069) ruralpop -0.008 -0.009 -0.067*** -0.035*** 0.009 0.034*
(%) (0.006) (0.006) (0.010) (0.010) (0.009) (0.019)
arabla -0.014*** -0.013*** 0.027*** 0.008 -0.047*** -0.020*
(100ha) (0.004) (0.005) (0.006) (0.006) (0.015) (0.011) autoc -0.325*** -0.202* -0.312* -0.086 -0.443*** -0.028 (index) (0.095) (0.078) (0.165) (0.204) (0.159) (0.200) autoc 0.038*** 0.036*** 0.049*** 0.020 0.062*** -0.007 (squared) (0.012) (0.012) (0.018) (0.022) (0.019) (0.026)
domestic*autoc -0.004**
(0.002)
aid*autoc -0.007***
(0.003)
constant -1.016*** 1.016*** 0.595*** 1.060*** 0.369*** 1.971*** 1.481*** 5.107*** 2.603*** 1.104* -1.785 (0.074) (0.074) (0.109) (0.083) (0.118) (0.357) (0.413) (0.837) (0.836) (0.624) (1.305) R-sq-within 0.9910 0.0923 0.1494 0.0806 0.1317 0.1592 0.1645 0.4808 0.3722 0.2749 0.2808 N-obs 1374 1374 961 1214 1214 1168 1168 336 296 266 360 N-countries 99 99 93 96 96 94 94 32 26 16 28 Standard errors in parentheses. * Significantly different from 0 at the 10% level. ** Significantly different from 0 at the 5% level. *** Significantly different from 0 at the 1% level. Bold aid parameters are significantly different from the corresponding parameter for domestic income at the 10% level. Underlined aid parameters are significantly different from the corresponding parameter for domestic income at the 5% level. Doubly underlined aid parameters are significantly different from the corresponding parameter for domestic income at the 1% level.
Table 3: Fixed-effect regressions for public spending on education
1 2 3 4 5 6 7 8 9 10 11
Indepvars:
Other expenditure
Aid dis-bursements
Low income Africa Asia Latin America
expenditure 0.948*** 0.052***
(% in GDP) (0.003) (0.003)
domestic 0.066*** 0.046*** 0.116*** 0.059*** 0.064*** 0.079*** 0.061*** 0.142*** 0.030***
(% in GDP) (0.005) (0.004) (0.007) (0.004) (0.010) (0.010) (0.009) (0.010) (0.006) aid 0.081*** 0.043*** 0.034*** 0.048*** 0.077*** 0.055*** 0.036** 0.087*** 0.063***
(% in GDP) (0.014) (0.008) (0.012) (0.007) (0.019) (0.011) (0.015) (0.015) (0.009)
domestic -0.001***
(squared) (0.000)
aid 0.001***
(squared) (0.000)
gdpcap -0.010 0.015 -1.050** 0.226 -0.003 -0.112 ($1000) (0.029) (0.029) (0.495) (0.281) (0.076) (0.069) popdens 0.002 0.002 -0.006 0.051 0.003 -0.195***
(10/km-sq) (0.003) (0.003) (0.030) (0.042) (0.006) (0.054) ruralpop -0.030*** -0.030*** -0.131*** -0.151*** -0.010 -0.054***
(%) (0.008) (0.008) (0.020) (0.024) (0.016) (0.015) arabla/cap 0.016*** 0.015*** 0.070*** 0.089*** -0.028 0.012 (100ha) (0.006) (0.006) (0.012) (0.014) (0.025) (0.009) autoc -0.106 -0.075 0.279 0.966** -0.001 -0.228 (index) (0.117) (0.134) (0.325) (0.471) (0.267) (0.157) autoc 0.017 0.019 -0.037 -0.104** 0.002 0.046**
(squared) (0.014) (0.014) (0.034) (0.050) (0.031) (0.020)
domestic*autoc -0.001
(0.002)
aid*autoc -0.007*
(0.004)
constant -2.094*** 2.094*** 1.701*** 2.368*** 1.151*** 3.201*** 3.049*** 9.458*** 7.507*** 0.944 6.334***
(0.096) (0.096) (0.135) (0.105) (0.146) (0.442) (0.508) (1.646) (1.686) (1.043) (1.019) R-sq-within 0.9841 0.1583 0.1977 0.1215 0.2193 0.1927 0.1950 0.3242 0.2976 0.4797 0.2930 N-obs 1377 1377 962 1217 1217 1171 1171 336 296 266 363 N-countries 99 99 93 96 96 94 94 32 26 16 28 Standard errors in parentheses. * Significantly different from 0 at the 10% level. ** Significantly different from 0 at the 5% level. *** Significantly different from 0 at the 1% level. Bold aid parameters are significantly different from the corresponding parameter for domestic income at the 10% level. Underlined aid parameters are significantly different from the corresponding parameter for domestic income at the 5% level. Doubly underlined aid parameters are significantly different from the corresponding parameter for domestic income at the 1% level.
Table 4: Aggregate aid by purpose, health and education
Health expenditure Education expenditure
1 2 3 4 5 6 7 8 9 10 Low income Africa Asia Latin
America Low income Africa Asia Latin America Domestic 0.040*** 0.053*** 0.041*** 0.046*** 0.055*** 0.059*** 0.078*** 0.061*** 0.143*** 0.030***
(% in GDP) (0.003) (0.005) (0.004) (0.006) (0.007) (0.004) (0.010) (0.009) (0.010) (0.006) Aid, health 0.100** 0.116*** 0.121*** 0.066 -0.152 (% in GDP) (0.047) (0.033) (0.039) (0.056) (0.221)
Aid, education 0.020 0.125* 0.104 0.042 0.064 (% in GDP) (0.047) (0.067) (0.083) (0.062) (0.133) Other aid 0.050*** 0.055*** 0.029*** 0.023** 0.110*** 0.049*** 0.051*** 0.030* 0.093*** 0.063***
(% in GDP) (0.006) (0.006) (0.007) (0.009) (0.013) (0.008) (0.012) (0.016) (0.017) (0.010) gdpcap 0.044* -1.187*** 0.218* -0.008 0.052 0.010 -1.113** 0.221 -0.009 -0.112 ($1000) (0.023) (0.251) (0.121) (0.046) (0.089) (0.029) (0.498) (0.282) (0.077) (0.070) popdens -0.003 -0.027* -0.046** 0.000 0.249*** 0.002 -0.006 0.054 0.003 -0.195***
(10/km-sq) (0.002) (0.015) (0.018) (0.003) (0.069) (0.003) (0.030) (0.043) (0.006) (0.054) ruralpop -0.007 -0.066*** -0.034*** 0.009 0.031 -0.030*** -0.132*** -0.150*** -0.012 -0.054***
(%) (0.006) (0.010) (0.010) (0.009) (0.019) (0.008) (0.020) (0.024) (0.016) (0.015) arabla -0.014*** 0.027*** 0.007 -0.047*** -0.019* 0.016*** 0.069*** 0.089*** -0.027 0.012 (100ha) (0.004) (0.006) (0.006) (0.015) (0.011) (0.006) (0.012) (0.014) (0.025) (0.009) autoc -0.323*** -0.308* -0.063 -0.438** -0.031 -0.109 0.288 1.007** -0.007 -0.229 (index) (0.094) (0.165) (0.203) (0.160) (0.200) (0.117) (0.325) (0.474) (0.267) (0.158) autoc 0.038*** 0.048*** 0.017 0.061*** -0.007 0.018 -0.038 -0.109** 0.003 0.046**
(squared) (0.012) (0.017) (0.022) (0.019) (0.026) (0.014) (0.034) (0.051) (0.031) (0.020) constant 1.963*** 5.126*** 2.582*** 1.093* -1.705 3.205*** 9.527*** 7.375*** 0.993 6.334***
(0.357) (0.834) (0.830) (0.586) (1.307) (0.442) (1.647) (1.938) (1.046) (1.024) R-sq-within 0.1600 0.4862 0.3835 0.2766 0.2838 0.1930 0.3267 0.2994 0.4809 0.2930 N-obs 1168 336 296 266 360 1171 336 296 266 363
N-countries 94 32 26 16 28 94 32 26 16 28
Standard errors in parentheses. * Significantly different from 0 at the 10% level. ** Significantly different from 0 at the 5% level. *** Significantly different from 0 at the 1% level. Bold aid parameters are significantly different from the corresponding parameter for domestic income at the 10% level. Underlined aid parameters are significantly different from the corresponding parameter for domestic income at the 5% level. Doubly underlined aid parameters are significantly different from the corresponding parameter for domestic income at the 1% level.
Table 5: Multilateral vs. bilateral aid and spending on health
1 2 3 4 5 6 7 8 9 10
Low income Africa Asia Latin America
Low income Africa Asia Latin America domestic 0.041*** 0.054*** 0.042*** 0.045*** 0.055*** 0.040*** 0.053*** 0.041*** 0.044*** 0.051***
(0.003) (0.005) (0.004) (0.006) (0.007) (0.003) (0.005) (0.004) (0.006) (0.007) aidmulti 0.040*** 0.055*** 0.057*** 0.042*** 0.084*** 0.038*** 0.050*** 0.047*** 0.039** 0.109***
(all/other) (0.011) (0.009) (0.009) (0.015) (0.031) (0.012) (0.010) (0.011) (0.015) (0.033) aidmulti 0.004 0.078 0.094* -0.203 -0.646**
(health) (0.075) (0.050) (0.051) (0.318) (0.329) aidbi 0.059*** 0.061*** 0.011 0.009 0.106*** 0.055*** 0.057*** 0.008 0.008 0.096***
(all/other) (0.008) (0.007) (0.011) (0.013) (0.013) (0.008) (0.008) (0.011) (0.013) (0.017) aidbi 0.199*** 0.164*** 0.141 0.062 0.258 (health) (0.070) (0.053) (0.119) (0.057) (0.303) gdpcap 0.046** -1.161*** 0.147 -0.013 0.051 0.047** -1.136*** 0.173 -0.013 0.057 ($1000) (0.023) (0.257) (0.122) (0.046) (0.089) (0.023) (0.256) (0.123) (0.046) (0.089) popdens -0.003 -0.026* -0.034* 0.001 0.246*** -0.003 -0.029* -0.040** 0.001 0.240***
(10/km-sq) (0.002) (0.015) (0.018) (0.004) (0.069) (0.002) (0.015) (0.019) (0.004) (0.069) ruralpop -0.007 -0.066*** -0.034*** 0.008 0.033* -0.007 -0.065*** -0.032*** 0.008 0.032*
(%) (0.006) (0.010) (0.010) (0.009) (0.019) (0.006) (0.010) (0.010) (0.009) (0.019) arabla -0.015*** 0.027*** 0.006 -0.048*** -0.020* -0.015*** 0.026*** 0.006 -0.049*** -0.020*
(100ha) (0.004) (0.006) (0.006) (0.015) (0.011) (0.004) (0.006) (0.006) (0.015) (0.011) autoc -0.316*** -0.293* -0.100 -0.484*** -0.030 -0.310*** -0.269 -0.068 -0.468*** -0.020 (index) (0.095) (0.169) (0.201) (0.161) (0.200) (0.095) (0.169) (0.203) (0.162) (0.200) autoc 0.037*** 0.047*** 0.022 0.067*** -0.007 0.037*** 0.044 0.018 0.065*** -0.008 (squared) (0.012) (0.018) (0.014) (0.019) (0.026) (0.012) (0.018) (0.022) (0.019) (0.026) constant 1.933*** 5.036*** 2.615*** 1.266** -1.719 1.911*** 4.934*** 2.537*** 1.280** -1.602
(0.358) (0.816) (0.825) (0.631) (1.311) (0.334) (0.850) (0.830) (0.632) (1.301) R-sq-within 0.1604 0.4813 0.3918 0.2822 0.2817 0.1636 0.4890 0.3979 0.2867 0.2932 N-obs 1168 336 296 266 360 1168 336 296 266 360
N-countries 94 32 26 16 28 94 32 26 16 28
Standard errors in parentheses. * Significantly different from 0 at the 10% level. ** Significantly different from 0 at the 5% level. *** Significantly different from 0 at the 1% level. Bold aid parameters are significantly different from the corresponding parameter for domestic income at the 10% level. Underlined aid parameters are significantly different from the corresponding parameter for domestic income at the 5% level. Doubly underlined aid parameters are significantly different from the corresponding parameter for domestic income at the 1% level.
Table 6: Multilateral vs. bilateral aid and spending on education
1 2 3 4 5 6 7 8 9 10 Low income Africa Asia Latin
America Low income Africa Asia Latin America domestic 0.058*** 0.079*** 0.060*** 0.135*** 0.030*** 0.058*** 0.077*** 0.058*** 0.136*** 0.030***
(0.004) (0.009) (0.009) (0.010) (0.006) (0.004) (0.010) (0.009) (0.010) (0.006) aidmulti 0.082*** 0.079*** 0.080*** 0.147*** 0.065*** 0.089*** 0.078*** 0.079*** 0.156*** 0.066***
(all/other) (0.014) (0.018) (0.022) (0.024) (0.024) (0.015) (0.019) (0.024) (0.026) (0.025) aidmulti 0.006 0.061 0.053 0.080 0.007 (education) (0.059) (0.083) (0.100) (0.081) (0.149) aidbi 0.028*** 0.040*** -0.020 0.039* 0.063*** 0.030*** 0.035** -0.024 0.045** 0.058***
(all/other) (0.010) (0.014) (0.025) (0.022) (0.010) (0.010) (0.015) (0.025) (0.023) (0.012) aidbi 0.015 0.220** 0.171 -0.007 0.337 (education) (0.070) (0.112) (0.144) (0.080) (0.343) gdpcap 0.004 -1.207** 0.116 -0.017 -0.112 0.004 -1.189** -0.111 -0.023 -0.112 ($1000) (0.029) (0.501) (0.281) (0.075) (0.069) (0.029) (0.505) (0.281) (0.076) (0.070) popdens 0.002 -0.001 0.067 0.004 -0.194*** 0.002 -0.000 0.066 0.004 -0.196***
(10/km-sq) (0.003) (0.030) (0.042) (0.006) (0.054) (0.003) (0.030) (0.042) (0.006) (0.054) ruralpop -0.030*** -0.135*** -0.147*** -0.011 -0.054*** -0.030*** -0.135*** -0.149*** -0.013 -0.053***
(%) (0.008) (0.020) (0.023) (0.015) (0.015) (0.008) (0.020) (0.023) (0.016) (0.015) arabla 0.016*** 0.071*** 0.085*** -0.030 0.012 0.016*** 0.072*** 0.090*** -0.028 0.012 (100ha) (0.006) (0.012) (0.014) (0.025) (0.009) (0.006) (0.012) (0.014) (0.025) (0.009) autoc -0.132 0.160 0.936*** -0.133 -0.229 -0.136 0.184 0.922** -0.138 -0.215 (index) (0.117) (0.331) (0.465) (0.265) (0.157) (0.117) (0.331) (0.469) (0.267) (0.159) autoc 0.020 -0.025 -0.100*** 0.018 0.046** 0.020 -0.029 -0.101** 0.018 0.044**
(squared) (0.014) (0.035) (0.050) (0.031) (0.020) (0.014) (0.035) (0.050) (0.031) (0.021) constant 3.309*** 9.913*** 7.532*** 1.473 6.327*** 3.310*** 9.880*** 7.696*** 1.525 6.271***
(0.441) (1.662) (1.907) (1.039) (1.024) (0.442) (1.661) (1.925) (1.047) (1.031) R-sq-within 0.1995 0.3308 0.3172 0.4998 0.2930 0.2009 0.3369 0.3222 0.5018 0.2946 N-obs 1171 336 296 266 363 1171 336 296 266 363
N-countries 94 32 26 16 28 94 32 26 16 28
Standard errors in parentheses. * Significantly different from 0 at the 10% level. ** Significantly different from 0 at the 5% level. *** Significantly different from 0 at the 1% level. Bold aid parameters are significantly different from the corresponding parameter for domestic income at the 10% level. Underlined aid parameters are significantly different from the corresponding parameter for domestic income at the 5% level. Doubly underlined aid parameters are significantly different from the corresponding parameter for domestic income at the 1% level.
Table 7: Aggregate aid from selected donors, health and education
Health expenditure Education expenditure
1 2 3 4 5 6 7 8 9 10 Low
income Africa Asia Latin America
Low
income Africa Asia Latin America domestic 0.039*** 0.048*** 0.037*** 0.042*** 0.054*** 0.055*** 0.068*** 0.054*** 0.140*** 0.036***
(0.003) (0.005) (0.004) (0.006) (0.008) (0.004) (0.010) (0.009) (0.010) (0.006) aidwba 0.048** 0.047** 0.034* 0.084*** 0.297*** -0.013 0.014 0.012 0.002 0.135
(0.025) (0.018) (0.019) (0.031) (0.115) (0.030) (0.037) (0.046) (0.051) (0.087) aidrdb 0.007 0.038** 0.029 -0.007 0.000 0.121*** 0.079** 0.085* 0.193*** 0.116**
(all/resp.) (0.021) (0.017) (0.020) (0.029) (0.064) (0.026) (0.033) (0.047) (0.048) (0.049) aideu 0.086*** 0.097*** 0.104*** 0.054* 0.028 0.114*** 0.114*** 0.099** 0.155*** -0.486***
(0.023) (0.018) (0.018) (0.029) (0.215) (0.028) (0.037) (0.042) (0.047) (0.162) aidothmul -0.121 0.007 0.030 -0.317*** -0.058 0.558*** 0.600*** 0.800** 0.665*** -0.080
(0.125) (0.109) (0.133) (0.118) (0.533) (0.154) (0.216) (0.316) (0.197) (0.406) aidsoft 0.111*** 0.091*** 0.066*** -0.050 0.123*** 0.043** 0.046 0.004 0.020 0.075***
(0.018) (0.017) (0.022) (0.037) (0.030) (0.022) (0.034) (0.053) (0.062) (0.023) aidgermany 0.033 0.051** 0.031 0.007 0.358 0.082** 0.080** 0.062 0.168 0.351**
(0.029) (0.020) (0.019) (0.072) (0.232) (0.036) (0.039) (0.045) (0.119) (0.177) aidfrance -0.020 0.004 0.060 -0.653*** 0.118 0.009 -0.057 -0.031 -0.478** 0.260**
(0.056) (0.045) (0.041) (0.140) (0.152) (0.070) (0.089) (0.099) (0.233) (0.116) aiduk 0.000 -0.021 -0.057** 0.051 0.119 -0.069* -0.087* -0.133** 0.060 -0.071 (0.032) (0.026) (0.024) (0.044) (0.194) (0.040) (0.051) (0.057) (0.073) (0.148) aidusa 0.052** 0.074*** -0.006 -0.174 0.068* 0.047* 0.031 -0.088 -0.458*** 0.032
(0.021) (0.021) (0.027) (0.106) (0.040) (0.026) (0.041) (0.064) (0.176) (0.030) aidjapan 0.023 0.054** -0.002 0.042** 0.079 -0.017 0.044 -0.015 0.082*** 0.052
(0.022) (0.022) (0.066) (0.017) (0.164) (0.027) (0.043) (0.156) (0.029) (0.125) aidothbil 0.048* -0.008 -0.073*** 0.135*** 0.091 0.010 0.029 -0.004 0.042 0.064
(0.025) (0.025) (0.027) (0.035) (0.061) (0.031) (0.049) (0.064) (0.057) (0.047) gdpcap 0.045* -1.147*** 0.104 -0.020 0.046 0.004 -1.295** 0.041 -0.022 -0.114*
($1000) (0.023) (0.255) (0.118) (0.043) (0.090) (0.029) (0.504) (0.280) (0.072) (0.068) popdens -0.003 -0.018 -0.033* 0.001 0.224*** 0.002 0.012 0.058 0.004 -0.172***
(10/km-sq) (0.002) (0.015) (0.018) (0.003) (0.072) (0.003) (0.030) (0.043) (0.006) (0.055) ruralpop -0.009 -0.063*** -0.031*** 0.008 0.029 -0.031*** -0.132*** -0.143*** -0.006 -0.052***
(%) (0.006) (0.010) (0.010) (0.009) (0.020) (0.007) (0.020) (0.024) (0.015) (0.015) arabla -0.014*** 0.028*** 0.007 -0.044*** -0.021* 0.018*** 0.074*** 0.084*** -0.013 0.011 (100ha) (0.005) (0.006) (0.006) (0.014) (0.011) (0.006) (0.012) (0.014) (0.024) (0.009) autoc -0.295*** -0.292* -0.203 -0.476*** -0.049 -0.146 0.011 0.612 -0.192 -0.309**
(index) (0.094) (0.172) (0.203) (0.158) (0.204) (0.116) (0.341) (0.483) (0.261) (0.155) autoc 0.035*** 0.045** 0.030 0.063*** -0.003 0.021 -0.011 -0.069 0.018 0.056***
(squared) (0.012) (0.018) (0.022) (0.019) (0.026) (0.014) (0.036) (0.051) (0.031) (0.020) constant 2.016*** 4.920*** 2.791*** 1.295** -1.320 3.391*** 10.149*** 8.301*** 1.060 6.113***
(0.357) (0.833) (0.807) (0.604) (1.373) (0.439) (1.649) (1.921) (1.002) (1.043) R-sq-within 0.1792 0.5251 0.4619 0.3881 0.2936 0.2225 0.3729 0.3597 0.5676 0.3419
N-obs 1168 336 296 266 360 1171 336 296 266 363
N-countries 94 32 26 16 28 94 32 26 16 28
Standard errors in parentheses. * Significantly different from 0 at the 10% level. ** Significantly different from 0 at the 5% level. ***
Significantly different from 0 at the 1% level. Bold aid parameters are significantly different from the corresponding parameter for domestic income at the 10% level. Underlined aid parameters are significantly different from the corresponding parameter for domestic income at the 5% level. Doubly underlined aid parameters are significantly different from the corresponding parameter for domestic income at the 1%
level.
Table 8: Aid from the soft bilateral donors by purpose, health and education
Health expenditure Education expenditure
1 2 3 4 5 6 7 8 9 10 Low
income Africa Asia Latin
America Low
income Africa Asia Latin America domestic 0.040*** 0.053*** 0.040*** 0.045*** 0.050*** 0.058*** 0.079*** 0.060*** 0.136*** 0.029***
(0.003) (0.005) (0.004) (0.006) (0.008) (0.004) (0.010) (0.009) (0.010) (0.006) aidmulti 0.042 0.108** 0.154*** -0.170 -0.699** 0.000 0.074 0.059 0.088 0.010 (hlth/educ) (0.076) (0.052) (0.057) (0.314) (0.332) (0.059) (0.085) (0.104) (0.083) (0.149) aidhmulti 0.040*** 0.053*** 0.051*** 0.049*** 0.108*** 0.095*** 0.084*** 0.093*** 0.156*** 0.070***
(other) (0.012) (0.010) (0.012) (0.015) (0.035) (0.015) (0.020) (0.025) (0.027) (0.026) aidsoft 0.199** 0.155*** 0.023 0.053 -0.327 0.374*** 0.413*** 0.345** 0.160 2.075**
(hlth/educ) (0.090) (0.059) (0.208) (0.068) (0.640) (0.141) (0.149) (0.172) (0.371) (0.968) aidsoft 0.101*** 0.089*** 0.050** -0.108*** 0.126*** 0.048** 0.030 -0.021 0.020 0.041 (other) (0.018) (0.017) (0.021) (0.041) (0.033) (0.022) (0.031) (0.048) (0.069) (0.025) aidothbil 0.128 0.087 0.067 -0.002 0.647 -0.093 -0.005 -0.263 -0.015 0.140 (hlth/educ) (0.116) (0.131) (0.140) (0.102) (0.506) (0.078) (0.162) (0.273) (0.081) (0.358) aidothbil 0.035*** 0.043*** -0.009 -0.021 0.086*** 0.018 0.039* -0.029 0.048** 0.035 (other) (0.011) (0.010) (0.013) (0.014) (0.024) (0.013) (0.020) (0.029) (0.024) (0.022) gdpcap 0.044* -1.148*** 0.157 -0.011 0.054 0.002 -1.160** -0.119 -0.021 -0.111 ($1000) (0.023) (0.256) (0.122) (0.045) (0.089) (0.029) (0.504) (0.281) (0.076) (0.070) popdens -0.003 -0.026* -0.036* 0.000 0.223*** 0.003 -0.002 0.067 0.004 -0.180***
(10/km-sq) (0.002) (0.015) (0.018) (0.003) (0.070) (0.003) (0.030) (0.042) (0.006) (0.056) ruralpop -0.008 -0.066*** -0.035*** 0.010 0.027 -0.031*** -0.133*** -0.145*** -0.012 -0.049***
(%) (0.006) (0.010) (0.010) (0.009) (0.020) (0.008) (0.020) (0.024) (0.016) (0.016) arabla -0.014*** 0.028*** 0.008 -0.052*** -0.019* 0.016*** 0.070*** 0.081*** -0.029 0.013 (100ha) (0.004) (0.006) (0.006) (0.015) (0.011) (0.006) (0.012) (0.015) (0.025) (0.009) autoc -0.304*** -0.272 -0.069 -0.575*** -0.011 -0.139 0.168 0.942** -0.167 -0.231 (index) (0.094) (0.169) (0.201) (0.163) (0.200) (0.117) (0.331) (0.468) (0.277) (0.159) autoc 0.036*** 0.043** 0.017 0.078*** -0.008 0.020 -0.026 -0.101** 0.022 0.045**
(squared) (0.012) (0.018) (0.021) (0.019) (0.026) (0.014) (0.035) (0.050) (0.033) (0.021) constant 1.978*** 5.010*** 2.718*** 1.422** -1.286 3.357*** 9.861*** 7.505*** 1.533 6.042***
(0.358) (0.850) (0.825) (0.623) (1.347) (0.441) (1.655) (1.926) (1.057) (1.065) R-sq-within 0.1704 0.4970 0.4137 0.3147 0.2966 0.2085 0.3453 0.3313 0.5025 0.3026
N-obs 1168 336 296 266 360 1171 336 296 266 363
N-countries 94 32 26 16 28 94 32 26 16 28
Standard errors in parentheses. * Significantly different from 0 at the 10% level. ** Significantly different from 0 at the 5% level. ***
Significantly different from 0 at the 1% level. Bold aid parameters are significantly different from the corresponding parameter for domestic income at the 10% level. Underlined aid parameters are significantly different from the corresponding parameter for domestic income at the 5% level. Doubly underlined aid parameters are significantly different from the corresponding parameter for domestic income at the 1%
level.
Table A1: List of recipients in main regression sample
Africa Asia Latin America Others Benin* Bhutan* Argentina Bahrain Burkina Faso* India* Bahamas Belarus
Burundi* Indonesia* Barbados Bulgaria Cameroon* Kazakhstan Belize Croatia Central African Rep.* Korea S. Bolivia Cyprus
Chad* Malaysia Brazil Czech Rep.
Congo Dem. Rep.* Maldives Chile Estonia Congo Rep.* Mongolia* Colombia Greece Cote d'Ivoire* Nepal* Costa Rica Hungary
Egypt Pakistan* Dominica Iran Guinea-Bissau* Singapore Dominican Rep. Israel
Lesotho* Sri Lanka El Salvador Kuwait
Madagascar* Tajikistan* Guatemala Latvia
Mali* Thailand Guyana Malta Mauritania* Tonga Haiti* Poland Mauritius Vanuatu Honduras* Portugal Morocco Jamaica Romania
Niger* Mexico Russia
Rwanda* Nicaragua* Slovakia Senegal* Panama Slovenia Seychelles Paraguay Spain The Gambia* Peru Syria
Togo* St. Kitts & Nevis Turkey
Tunisia St. Lucia Yemen*
Zambia* Suriname Zimbabwe* Trinidad & Tobago
Uruguay Venezuela
* denotes low-income countries.