Trade versus aid: donor generosity in an era of globalization |
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Authors: | Erik Lundsgaarde Christian Breunig Aseem Prakash |
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Institution: | (1) Department of Political Science, University of Washington, Box 353530, Seattle, WA 98195-3530, USA;(2) Department of Political Science, University of Toronto, Ontario, Canada |
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Abstract: | Why do foreign aid budgets vary across countries and over time? Existing research indicates that the same set of factors shapes commitments toward both domestic and international redistribution. While scholars have acknowledged international normative influences on aid allocations, research on levels of donor generosity has not examined how international trade influences aid budgets. This paper examines whether imports from developing countries have a ‘displacement effect’ on aid commitments. Employing a panel of nineteen OECD donor countries, we analyze aid budgets from 1980 to 2000. We find that increased imports from developing countries to donor countries are associated with aid reductions. These results persist after controlling for international and domestic variables identified in previous research, and under other estimation techniques and model specifications. |
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Keywords: | Foreign aid Donor generosity Trade |
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