To Give or Not to Give? How Do Other Donors React to European Food Aid Allocation?

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Using a change in EU food aid policy in 1996 as an instrument for EU food aid allocation, I investigate how other donors react to the EU’s food aid allocation. At that time, the EU suddenly divided by two the number of its food aid recipients. On average, other donors imitate the EU at both extensive and intensive margins. Donors’ reactions are heterogeneous: European countries and Canada herd the EU, while the World Food Programme substitutes. The USA do not react. Those results can be explained by competition for relative impact and information effects. For a recipient country who constantly received food aid from the EU before 1996, the number of donors decreases by almost 0.5. This behavior reinforces the problem of orphan and darling recipients.