Comparing the Determinants of US-Funded NGO Aid Versus US Official Development Aid

Abstract

Using a principal–agent approach, I seek to determine if differences exist between official US development aid (ODA) and US-funded non-governmental organizations (NGOs) development aid allocation. NGO scholars have expressed concern regarding NGOs' relationships with their government funders (Hulme and Edwards, NGOs, States, and Donors, St. Martin’s Press, New York, 1997); (Smillie, Stakeholders, Earthscan, London, 2000). Studies of European state-funded NGOs have found that need rather than political or economic interests determines state-funded NGO aid (Nancy and Yontcheva, Does NGO Aid Go to the Poor? Empirical Evidence from Europe. International Monetary Fund Working Paper 06/39, 2006; Dreher et al. 2009; World Economy 33:147–176, Kiel Working Paper No. 1486. Kiel, Germany: Kiel Institute for the World Economy, 2010) however; no study has examined US-funded NGO aid allocations. Results indicate that US-funded NGO aid mirrors US ODA allocations.