Are Foreign Aid Donors Strategic? The Role of Conflicts and UN Votes in Bilateral Aid Allocation.

Abstract

Do donors ’ strategic interests, including political and economic goals, condition bilateral aid allocation? We theorize that strategic donors evaluate United Nations voting as a signal of future cooperation. We also introduce a new variable to the allocation debate, positing that donors consider recipients ’ geographic proximity to conflict when allocating aid. Estimating strategic and altruistic determinants of allocation for twenty donors, we find that allocation is based not only on the development it could create, but on the cooperation it could encourage. Aid is channeled to recipients that do not contain or border conflicts, but do maintain voting relationships with donors.