Official Development Aid Research Articles

Foreign Technology Absorption in Sub-Saharan Africa: A Long-Term Analysis of the Nature and Stability of Relationships

The goal of this paper is to investigate the relationships between the process of technology absorption, official development aid (ODA), foreign direct investment (FDI), and import in Sub-Saharan Africa. We investigate long-run relationships between the process of technology absorption in the region. The investigation is based on such variables as ODA, FDI as well as import from developing and developed economies to estimate co-integration relationships and error-correction models. The results obtained indicate that aid and import from the South are more likely to cause the absorption of technology than other directions of flow.

ПОМОЩЬ РАЗВИТИЮ НА ПОСТСОВЕТСКОМ ПРОСТРАНСТВЕ КАК ИНСТРУМЕНТ ПОЛИТИКИ ЕВРОПЕЙСКОГО СОЮЗА

The article presents analysis of the development assistance machinery used by the European Union, and its application to the post-Soviet space. The EU makes its “Global Strategy” the basis for application of various foreign policy tools, including the tool of foreign aid. Much of the EU effort in the field is based on two pillars – the Sustainable Development Goals, as formulated in the United Nations, and the EU’s key value priorities – support for democracy and human rights. While the European External Action Service does add up to the EU’s foreign policy coherence, the development aid and humanitarian assistance are run by separate EU agencies, which allows to take into account the specificity of this policy field. When the European Union institutions and member states are treated as a unified official development aid provider, it makes sense, since the member states share the key priorities in the field and make use of coordination in the EU. Ukraine is much more than a foreign aid recipient for the European Union. As a result of the political crisis that creates troubles for the country since 2014, the EU does feel the necessity to provide diverse support to Ukraine, though it stops short of agreeing to Ukraine’s candidacy for membership in the Union. In this context foreign aid becomes one of the tools that help to resolve some of Ukraine’s acute problems. Central Asia is much less of a priority for the European Union, although the opportunities which can open for the EU’s presence through foreign aid are carefully explored. The approach to Central Asian countries varies greatly. Kyrgyzstan and Tajikistan as the most vulnerable remain the recipients of conventional sorts of assistance, while Kazakhstan is ready for a much more equal partnership, thus, showing the way to others. While the EU’s approach to the post-Soviet space will be ever more differentiated, depending on the partners’ development and readiness to build advanced relations, foreign aid will remain among the EU’s notable foreign policy instruments, albeit far from being the only one.&nbsp

"It All Started from Worms": Korea-Japan Parasite Control Cooperation and Asian Network, 1960s - 1980s.

The Korea Association of Health Promotion and Japanese Organization for International Cooperation in Family Planning (JOICFP), and Taiwan's Chinese Foundation of Health all originated from parasite control organizations. Currently these organizations hold no apparent relations to parasite control activities. However, many of the senior leaderships of these organizations including presidents, have parasitology as their background. Kunii Chojiro (the founder of Japan Association of Parasite Control (JAPC) and JOICFP) explained it as "it all started from worms." In 1949, Kunii Chojiro established JAPC after personally experienced intestinal parasite infection. The JAPC people conducted mass examination and mass chemotherapy focusing on school children, which allowed them to have sustainable income. In 1965, the Korea Association of Parasite Eradication (KAPE) requested JAPC to assist Korea's parasite control activity. In 1968, when Korea-Japan cooperation for parasite control activity established, Japan's operating procedures were directly absorbed by KAPE. With support from JAPC and official development aid through Overseas Technical Cooperation Agency in Japan (now Japan International Cooperation Agency), Korea successfully controlled parasite infection. Post-war and cold-war geopolitics had a significant impact on Korea-Japan cooperation. In 1960s the president of KAPE, Chong-Chin Lee and Kunii Chojiro were well known figures in population control network. They did understand the importance of population control, but did not agree with the approaches taken by western population control experts. From their point of view, it had to be self-initiated, economically self sustainable grass-root activities rather than top-down activities, as experienced in their parasite control in Japan and Korea. This lead to a new Asian model named "Integrated Program". Together with their influence in population control network, Kunii and Lee manage to secure the fund from IPPF. Emergence of Integrated Program showed how collective experience of Asia, as well as overlap of networking formed 'Asian Model' of public health activities. Kunii and Lee shared the same agenda to enable people to have better life through public health measures. While they funneled money from global population control network, they were more interested in securing sustainability of the parasite control activities. This paper focuses on activities and experiences of Kunii Chojiro and Chong-Chin Lee to show interplay of Cold War geopolitics in Asia led to emergence of Asian network.

Development aid and infant mortality. Micro-level evidence from Nigeria

While there is a vast literature studying the effects of official development aid (ODA) on economic growth, there are far fewer comparative studies addressing how aid affects health outcomes. Furthermore, while much attention has been paid to country-level effects of aid, there is a clear knowledge gap in the literature when it comes to systematic studies of aid effectiveness below the country-level. Addressing this gap, we undertake what we believe is the first systematic attempt to study how ODA affects infant mortality at the subnational level. We match new geographic aid data from the AidData on the precise location, type, and time frame of bilateral and multilateral aid projects in Nigeria with available georeferenced survey data from five Nigerian Demographic and Health Surveys. Using quasi-experimental approaches, with mother fixed-effects, we are able to control for a vast number of unobserved factors that may otherwise be spuriously correlated with both infant mortality and ODA. The results indicate very clearly that geographical proximity to active aid projects reduces infant mortality. Moreover, aid contributes to reduce systematic inter-group, or horizontal, inequalities in a setting where such differences loom large. In particular, we find that aid more effectively reduces infant mortality in less privileged groups like children of Muslim women, and children living in rural, and in Muslim-dominated areas. Finally, there is evidence that aid projects are established in areas that on average have lower infant mortality than non-aid locations, suggesting that there are biases resulting in aid not necessarily reaching those populations in greatest need.

Donors’ Trade and Their Supply of Development Aid Related to the Trade Sector: Does Donors’ Output Gap Matter?

This paper complements the literature on the impact of donor-countries’ trade on their supply of Official Development Aid relating to the trade sector (ODATRADE). It investigates whether the impact of donor-countries’ trade balance (including overall trade balance in goods and services, trade balance in goods vis-à-vis developing and developed countries, and trade balance in services) on ODATRADE depends on the level of donor-countries’ output gap. Relying on a sample of 22 donor-countries over the period 1967–2015, the empirical analysis shows that donors’ output gap does matter for the impact of trade balance variables on ODATRADE.

Are Remittances Good for Labor Markets in LICs, MICs and Fragile States?

We present cross-country evidence on the impact of remittances on labor market outcomes. Remittances appear to have a strong impact on both labor supply and labor demand in recipient countries. These effects are highly significant and greater in size than those of foreign direct investment or official development aid. On the supply side, remittances reduce labor force participation and increase informality of the labor market. In addition, male and female labor supply show significantly different sensitivities to remittances. On the demand side, remittances reduce overall unemployment but benefit mostly lower-wage, lower-productivity nontradables industries at the expense of high-productivity, high-wage tradables sectors. As a consequence, even though inequality declines as a result of larger remittances, average wage and productivity growth declines, the latter more strongly than the former leading to an increase in the labor income share. In fragile states, in contrast, remittances impose a positive externality, possibly because the tradables sector tends to be underdeveloped. Our findings indicate that reforms to foster inclusive growth need to take into account the role of remittances in order to be successful.

Economic Resources, Financial Aid and Remittances

According to the World Bank, in 2017, an estimated 450 billion US dollars in remittances were sent to Low and Middle Income Countries. This means that the sum of remittances is more than three times larger than the sum of the world's total official aid to the same countries. The practice of sending remittances can be seen as one specific thing that migrants do as part of sustaining ties with their countries of origin. Remittances can be personal gifts, but are often sent in order to support family members and friends in their country of origin living under more difficult economic conditions. Remittances may also be a form of investment or repayments of loans. In this study we use data from the latest Swedish level of living survey LNU-UFB to study the factors influencing the propensity to remit. Using probit estimations, we find that the economic situation of the migrant, demographic variables and the migrants' ties to the home country are important. The propensity to remit also varies by country of origin. With an increasing number of migrants, the propensity to remit will have growing policy implications. It will have implications for Sweden as a donor country, raising issues of complementarity between remittances and official development aid. Migrants' propensity to remit will also be increasingly relevant for Sweden's integration policies, as the motives to remit might shape immigrants' decisions and priorities while settling in Sweden.

Analysis on Korea ODA for Governance Sector from the Perspective of Development Effectiveness

본 연구는 개발효과성 달성을 위해서 영향력(impact), 주인의식(ownership), 적절성(relevance), 포용성(inclusiveness) 원칙이 필요하다고 보고, 한국의 공공행정 분야 공적개발원조사업(ODA)이 네 가지 기준에 비춰 어떤 특징을 나타내는지 분석한 뒤 개선방향을 제시하였다. 첫째, 영향력 면에서 공공행정 분야 ODA 사업들은 최근 오히려 원조사업이 소규모화되고 있어 영향력을 발휘하기에는 부족한 점이 있었다. 둘째, 주인의식 면에서 수원국 시스템을 활용한 원조를 통해 수원국이 정책과정에 참여하도록 해야 함에도 불구하고 아직 수원국 시스템을 이용한 원조는 초기 단계에 불과하였다. 셋째, 수원국의 발전전략과 발전단계에 적절성을 갖추었는지를 공공행정 분야 ODA 중 가장 많은 비중을 차지하는 전자정부 사업을 대상으로 살펴본 결과, 공급자 위주의 고도화된 시스템 지원사업을 실시하고 있는 경우가 여전히 존재하고 있었다. 끝으로 시민사회와 민간의 행위자들의 참여를 보장하여 포용성 확보해야 함에도 불구하고 공공행정분야 원조사업은 아직 공공부문 참여자에 의존하는 경향이 있었다. 따라서 향후 정책개선방향으로서 수원국 재정시스템을 활용한 원조 및 프로그램형 원조로의 전환, 거버넌스 분야의 수원국 정책대화 참여와 수원국의 발전전략에 부합하는 성과 프레임워크 도입 등을 제안하였다.Development effectiveness is supported by four principles: Impact, Ownership, Relevance, and Inclusiveness. Based on this framework, it analyzes South Korea’s grant aid projects in the area of public administration and presents policy recommendations. Findings of this study confirm that South Korea’s Official Development Aid (ODA) projects for public administration are too small in scale to have tangible impact. Moreover, projects that aim to instill a sense of ownership among recipient countries were still at an elementary stage, marked by failures to build on local financial systems. Although it has been tried to provide development aid according to the level of development in recipient country, this practice has yet to be fully established in African regions or some of Least Developed Countries (LDCs) by providing high-tech e-government system from the perspective of supplier-oriented. Lastly, aid earmarked for public administration was still highly dependent on the public sector, rather than guaranteeing inclusiveness and diversity based on multiple stakeholder participation. Results of the analysis above reveals a pressing issue concerning aid projects in the area of public administration. Specific policy suggestions are also identified, such as development of ODA that utilizes local systems of the recipient country, the transition to program-based aid, participation of policy dialogue on governance and establishment of a result framework and performance evaluation system that considers national development strategies of the recipient country.

Canadian Official Development Aid to Latin America: The Struggle over the Humanitarian Agenda, 1963–1977

During the 1970s, as part of the Third Option policies of the federal government under Pierre Elliott Trudeau, Canada’s Official Development Aid (ODA) policy for Latin America was revised to give the private sector greater maneuverability within parts of Latin America and the Caribbean. This article’s focus on the internal and external institutional debates that surfaced over the shift from a humanitarian to a market-driven agenda reveals a moment in Canadian history when the nation’s external affairs cohesiveness was destabilized, marginalizing religious and humanitarian stakeholders that in the past had been instrumental in complementing and advancing Canada’s relief and rehabilitation efforts across the global South. An examination of the historical evidence suggests that Canada’s public “goodwill” of the 1950s and 1960s did not narrow in on Latin America during the early stages of ODA policy implementation; instead, it was the private sector that focused on this region. The shift in the ODA agenda was a direct response to the private sector’s regional business strategy as well as a foreign policy initiative to support US containment. The analysis concludes that this implicated Canada in the humanitarian crisis generated by the implementation of US Cold War policies in Latin America and the Caribbean during the 1970s, forcing humanitarian and religious groups to centre their attention on the region and ultimately leading to an ideological confrontation between sectors of civil society and government.

Transnational Solidarity—Not Aid: The Perspective of Migration on the Hype about Migration&Development

Migrants have organized transnational support for non-migrants, stay-at-homes, citizens and noncitizens, as well as for developmental or integrationist nation state projects for decades. These solidarities have been framed as “cultural programs,” “autochthone support of hometowns,” “development aid” or “diaspora politics.” Since the turn of the century especially those projects that could be framed as “development aid” have gained a lot of interest from official development aid and its agencies. More and more programs have been launched to coordinate and professionalize the transnational support labor of migrants under the aegis of development. This is what I call the hype about migration&development. In this article, I want to show why the notion of “migrant development aid” used in the hype falls short of what is at stake when it comes to transnational migrant solidarities. Thereby, I want to argue that looking at migration through its governance and through migration or development politics is short-sighted and insensitive towards the desires, ethics and politics of migration. This is the reason that a perspective of migration—such as that propagated by the autonomy of migration approach—needs to be brought into debates on migration&development.

Linking ODA to the MPI: A Proposal for Latin America

The article starts from the Multidimensional Poverty Index (MPI) methodology and measures ( Santos et al. 2015 ) available, and uses them to compare the current disbursements of Official Development Aid (ODA) with MPI-related deprivations and indicators. In particular, the six deprivation dimensions are matched with the current sectorial classifications contained in the OECD-CRS database. This empirical exercise allows making a comparison between ODA donors’ current disbursements (priorities) and normative disbursements, if the MPI were taken as the rule in order to attain the objective of real poverty eradication. Important political consequences of this counterfactual exercise are deduced: Latin American development agencies (ministries or departments) should start to register ODA flows using the multidimensional poverty dimensions (housing, basic services, standard of living, education, and employment, and social protection); donors (both North-South and South-South Cooperation) should focus their resources and priorities on the MPI structure, increasing recipients’ ownership of development strategies and interventions. This information and way of delivery may make it possible to focus the evaluation of ODA flows more deeply on their impact on poverty, in line with Busan’s recommendations and the post-2015 development agenda (SDG 1).

An empirical assessment of the relationship between Official Development Aid and child mortality, 2000–2015

To analyze the effect of Official Development Aid (ODA) dollars on child mortality over the course of the United Nation's Millennium Development Goals initiative. The relationship between child mortality and Official Development Aid over the duration of the Millennium Development Goals (2000-2015) is examined here using a longitudinal panel of country-level data from the World Bank and the United Nations. An Ordinary Least Squares regression approach was used with country-level fixed effects. Models were estimated for the full sample and by Human Development Index development strata (high, medium, and low developed countries) with clustered standard errors. ODA appears to be most strongly associated with decreases in child mortality in Medium Developed Countries. Every one dollar per capita increase in ODA is associated with a 0.035 decrease in child deaths per 1000 births. Significant gains were made in decreasing child mortality over the last 15years. The need for more progress remains. Allocation of ODA to developing countries can be an effective policy tool in achieving public health goals.

U.S.– Japan Relations and Official Development Aid

U.S.– Japan Relations and Official Development Aid

The Key Drivers of Poverty in Sub-Saharan Africa and What Can Be Done About it to Achieve the Poverty Sustainable Development Goal

The first Sustainable Development Goal targets ending poverty in all its forms everywhere by 2030. And one of the most remarkable achievements during the MDG era was the significant decline in the share of the extremely poor in the global population, leading to the global attainment of cutting the extreme poverty rate to half its 1990 level by 2015. However, Sub-Saharan Africa remained the only developing region where the MDG 1 target was not achieved. Based on the updated poverty line of $1.90 a day, poverty reduction in Sub-Saharan Africa significantly lags other developing regions. Understanding the key drivers and ways of tackling poverty in Sub-Saharan Africa becomes one of the pressing development challenges of our time. Our empirical estimates for the period, 1980 to 2013, show that the key factors significantly feeding poverty incidence and poverty depth in the region include high income inequality, oil-dependence, institutionalized democracy, high prevalence of HIV among the female youth, and increased civil war episodes. On the other hand, the key drivers significantly reducing poverty in the region are higher levels of economic development (income per capita), higher general government final consumption expenditure, higher official development assistance and aid received, urbanization, and access to improved water source. The policy implications are discussed.

El Principio de Responsabilidades Comunes pero Diferenciadas

Este artículo analiza el progreso histórico del Principio de Responsabilidades Comunes pero Diferenciadas, sus orígenes en el terreno del Derecho Económico; su transición al Derecho Ambiental y los esfuerzos que los países en desarrollo realizan por su ingreso y consolidación al terreno jurídico de la cooperación internacional para el desarrollo. El activismo que los países en desarrollo, especialmente los categorizados como Países de Renta Media, han desplegado para obtener el reconocimiento del principio, se debe a que ostentan altos niveles de pobreza e inequidad y actualmente no reciben o reciben menos Ayuda Oficial al Desarrollo, pero sobre todo radica en la indicación que se les ha hecho de la obligación de actuar como donantes y asumir responsabilidades en material de desarrollo.

Diaspora philanthropy: the making of a new development aid?

The article is a critical engagement that answers the ‘what’, ‘for whom’ and ‘how’ of diaspora philanthropy. Diaspora philanthropy, although very much an important part of migrant economic and cultural life, is hardly theorised. It does not attract as much attention as remittances, although both are poised to make significant contribution to development. Given the decreasing amount of official development aid to the developing world, migrant philanthropy and remittances are being groomed as the new development aid, and migrants, the enabler of development. Under the banner of migration–development nexus, diaspora philanthropy promotes the active participation in the development of sending countries by diaspora communities. In this article, I argue that flexibility is diaspora philanthropy’s characteristic that allows it to serve the purposes of migration governance bodies and be absorbed by their discourse. Moreover, I also examined how diaspora philanthropy, or the migration–development nexus more broadly, is a response to crisis globally felt and needed a synergised solution that migrants and the wealth they created can provide. While the potential of diaspora philanthropy is recognised by economic managers, its principles may not be as easy to execute. I then use the experiences of Philippines’ LINKAPIL program to outline the challenges that pose difficulties in the implementation of diaspora philanthropy. In sum, the article questions whether the promise ascribed to diaspora philanthropy has a strong basis to be realised in the name of development.

Political Economic Determinants of Growth Acceleration: A Korea-Indonesia Comparative Study

This paper conducts an empirical and comparative analysis in political economy of growth acceleration determinants in Korea and Indonesia. It aims to reveal plausible explanations on Korean development success compared to Indonesia. This research provides an in-depth study parallel to a case study by using comparable variables. It examines five determinants namely initial conditions, quality of institutions, public policy innovations, socio-political circumstances, and access to external resources. The evidence exhibits Korea has better conditions in all determinants. Lesson learned from its development experiences could improve the effectiveness of the Korea official development aid.

De l’aide publique à une coopération transformée ?

Au cours des dernières décennies, les acteurs publics traditionnels fournisseurs d’aide publique au développement se sont trouvés confrontés au rôle croissant d’autres acteurs de la coopération (pays émergents, fondations privées, etc.) dont les logiques comportementales sont très variables. D’autre part, la frontière, autrefois très claire, entre action publique et action privée s’estompe au risque de négliger la fourniture de biens publics clés du développement. Face à ces transformations, coordonner ces actions de coopération devient de plus en plus difficile et le risque est grand de conduire ainsi à une incohérence des politiques nationales menées par les Etats dans certains pays et en particulier dans les pays les moins avancés. Plus que jamais pour assurer cette cohérence, il s’impose de renforcer leurs capacités d’action par une coopération portant sur les secteurs clés pour le développement à long terme tel que la formation des ressources humaines.

Role of Japanese official development assistance in enhancing infrastructure development in India

Assistance to India from Japan under its Official Development Aid (ODA) programme has been particularly important for infrastructure development. India has been the single largest recipient of Japanese ODA since 2003–2004. Most of it has been directed towards long-term participation in infrastructure, much of which comes from the enormous demand. With the Indian Prime Minister’s visit on 3 August 2014, Japan committed to invest $35 billion in different sectors focusing on infrastructure in the coming five years. This investment will boost India’s infrastructure sector. Poor infrastructure is a constraint to sustaining India’s high and inclusive growth rate. One major bottleneck in infrastructure development is infrastructure financing (along with many others, such as land acquisition, environment clearance, and cost-time overruns). In this context, the paper explores the impact of Japanese ODA on the infrastructure sector in India, the trends and priority sectors for Japanese ODA, and the problems and challenges of this developing relationship.

Nonlinearity in the efficacy of foreign aid and evidence of poverty traps

Research on the efficacy of foreign aid has been extensively conducted over the last three decades, but empirically the results remain inconclusive. Previous literature has relied upon linear growth model to estimate their models, methods inconsistent with the existence of poverty traps. These approaches have found that the effect of foreign is either negative, to positive, or even conditional on the policy environment in the country. More recent theoretical literature has started to point towards a nonlinear effect of foreign aid on the level of income. This nonlinear effect is consistent with a poverty trap model. To provide empirical support for this theory this paper relaxes the assumption of linearity in the model to determine if the efficacy of foreign aid is nonlinear. To accomplish this the relationship between foreign aid and the level of income is examined using a cross sectional data set of 72 countries that received Official Development Aid between 1985 and 2014 using a multivariate adaptive regressive splines (MARS) estimation. The MARS model is a nonlinear approach that systematically identifies both threshold levels and interaction terms between independent variables. Most importantly, the MARS model will detect if foreign aid has a statistically significant threshold effect. This finding would be consistent with the poverty trap hypothesis and also explain why there has been a lack of consensus so far. The results suggest that by using a nonlinear estimation we significantly improve, 18 to 44 percent reduction in the residual sum of squares, the fit of our growth model compared to an ordinary least squares estimation, as well as also detect a threshold in the effect of foreign aid that is consistent with a poverty trap hypothesis. These results are consistent when we analyze foreign aid as either a percent of gross national income—threshold at 4.6 percent—or per capita—threshold at $24.97. Below these thresholds the effect of foreign aid is either negative, or statistically zero, but when foreign aid is sufficiently large the effect is large and positive. We also detect significant interactions between foreign aid and both human capital and population growth. The policy implication being that if a country is going to experience a positive impact on their level of income the amount of foreign aid needs to be sufficiently large enough. Furthermore, the interactions suggest that some degree of selectivity should take place on which countries are best equipped to use aid.