Aid and ideology

Abstract. A conceptualization of international aid-giving behaviour, based on the notion of bounded rationality and involving the interaction of objective and subjective factors, is developed. From this conceptualization, four hypotheses are deduced to explain the variation of development aid expenditures as a percentage of GNP: the instrumental hypothesis, the humanitarian hypothesis, the ideological hypothesis, and the incremental hypothesis. These hypotheses are tested on data concerning aid allocations of 17 OECD donors for four points in time (1966, 1971, 1976, and 1981), through the use of a regression model. Results show that the model as a whole explains between 85% and 96% of the variance in the dependent variable. Tests of individual hypotheses show that the instrumental explanation is the best predictor of aid as a percentage of GNP if a lagged value of the dependent variable is used on the right-hand side of the equation. When the lagged value of the dependent variable is dropped from the equations, the best predictor is the ideological explanation. The contribution of the humanitarian explanation to the explained variance is negligible.