Official Development Assistance Research Articles

Revisiting the determinants of tax revenue: an integrative model with conventional, economic policy and institutional factors

PurposeThe Indian government is grappling in generating sufficient revenue resources through taxation to meet their expenditure on public goods and services. Therefore, the government authorities must possess adequate information on factors affecting the taxation revenue of the country to craft and execute policies effectively. Hence, this study endeavors to explore the determinants of tax revenue by incorporating conventional, economic policy and institutional factors.Design/methodology/approachThe study employed the Auto Regressive Distributed Lag (ARDL) modeling by using the data set from 1991 to 2022 according to the availability of the data.FindingsThe findings illustrate that trade openness, life expectancy, value added by the manufacturing sector and per capita GDP (Gross domestic Product) positively affect the tax efforts of the government in the conventional determinants. Similarly, in economic policy factors, the financial deepening also exhibits a favorable effect. Conversely, the inflation rate positively boosts the tax efforts in the short run, but it ultimately erodes the tax effort of the government in the long run. In the institutional factors, the official development assistance also illustrates a positive effect.Practical implicationsThe findings assert that the Indian government should devise better macro-economic and foreign trade policies with expediting the economic restructuring and bolstering their ability to manage and utilize the foreign aid assistance to boost the tax revenue of the country.Originality/valueTo the authors’ knowledge, this is the first study to incorporate these factors in the Indian context.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-04-2024-0314

Finding Benefits over Reluctance – Promoting Finnish Trade during African State Visits in Finland in the 1980s

ABSTRACT In the mid-1980s, Finnish decision-makers pursued a policy of increased trade with the Global South. This article examines the contributions of Finnish policymakers and company representatives to the commercial aspects addressed during the state visits from Africa in the mid-1980s. The article concentrates on the visits of political leaders from Zambia and Tanzania in 1985, and from Kenya in 1987. These visits have been selected due to their temporal proximity, the commercial connotations in the schedule of the visits, the similarity of the visiting states, and the significance of the given Finnish official development assistance (ODA). The findings present answers to the question of what the premises and justifications were for and against these commercial contributions. The article presents an overview of the aspects that were crucial to the decision-making when Finnish actors conducted trade-oriented relations with African states. The findings indicate that despite the initial reluctance to make arrangements, the conducted visits led to an increased promotion of trade-related aspects between Finland and its counterparts. The most crucial achievements were offering Finnish companies a chance to present their knowhow to African political leaders and stimulating discussion between these parties, in conjunction with Finnish policymakers providing their assistance.

Shifting official development assistance during COVID-19: earmarking, donor concentration and loans

ContextIn contrast to bilateral aid, aid disbursed from multilateral institutions increased significantly at the onset of the COVID-19 pandemic. Yet, at a time when a coherent and effective multilateral response...

Redefining Middle Power Diplomacy: South Korea’s Strategic Shift towards Global Leadership

This paper explores South Korea’s evolving foreign policy under the Yoon Suk-yeol administration, highlighting its shift from a traditional middle power to a “Global Pivotal State” (GPS). The study examines the key drivers behind this transformation, particularly the enhanced U.S.-South Korea alliance, which has allowed South Korea to increase its regional and global influence. Through an analysis of the "Global Pivotal State" policy, the paper delves into how South Korea seeks to expand its leadership role in multilateral diplomacy, focusing on areas such as security, democracy, and climate change. Additionally, the study emphasizes South Korea’s efforts to strengthen bilateral relations, especially with the U.S., Japan, and Europe, while expanding its diplomatic reach to new regions such as the Indo-Pacific. By leveraging its strengths in green growth, technology, and official development assistance (ODA), South Korea aims to secure leadership in key global issues. Ultimately, the Yoon administration’s vision reflects South Korea's ambition to redefine its role in the international order, positioning itself as an influential actor in global governance.

Donor country official development assistance in health R&D: domestic economic burden vs. medical disseminative capacity

Abstract This study examines domestic determinants of donor country official development assistance (ODA) in health research and development (R&D). It argues that health R&D ODA is negatively related to domestic economic burden, i.e. pressures that donor governments face because of economic issues in their own country, while also positively influenced by long-standing capabilities in medicine and medical research that are projected globally. Using panel data on forty-four donor countries over a 6-year period, the study finds support for a negative relationship between domestic economic burden and donor country health R&D ODA. It also finds a positive relationship between medical disseminative capacity (MDC) and donor country health R&D ODA, as well as with the ratio of health R&D ODA to overall ODA. While domestic economic burden dampens the overall appetite for health R&D ODA, MDC helps to reverse this and ensures that the proportion of ODA that goes to health R&D in developing countries is increased.

The Magnitude Of The Informal Remittances Flow To Kenya: An Augmented Gravity Model Approach.

Background: In Kenya remittances are now a proper source of external finances. Kenya received $4.19 billion in form of diaspora remittances in year 2023. Over the years, remittances are proving to be more stable, well diversified and are promising more growth relative to foreign direct investments, official development assistance, private capital and exports. On the micro scale the remittances are helping achieve Kenya’s developmental goals of having a globally competitive human resource and an adequately and decently housed population as outlined in the country’s development blueprint - The Kenya Vision 2030. Though the remittances are these important, official remittance data in Kenya, as well as in many African countries, only include remittances sent through formal channels such as banks and Money transfer Operators. Remittances through the informal channels such as hawalas and hundis are not recorded. This means that the recorded remittances are grossly understated impeding the capacity of policy makers to design appropriate policies aimed at encouraging remittances. The study employed panel data analysis and a thought experiment on remittance data between 2013Q1 and 2022Q4. Through a thought experiment, the study asks what impact a reduction of the costs of sending remittances would have on remittances if the transaction costs were reduced to that of the informal channels of sending remittances. The analysis revealed that the size of the informal remittances in Kenya is between 20% and 26% of the formal remittances. On the determinants of remittance flows to Kenya, the study establishes that Kenyan migrants send more when the economic freedoms and economic conditions improve in their host nations but send less when economic freedoms back at home improve. Accurately measuring informal emittances in Kenya is vital for creating effective government policies. This data would reveal the true extent of remittances' impact on the economy, allowing policymakers to develop strategies that fully utilize their potential for development. By encouraging people to send money through official channels, the government can increase tax income, improve access to financial services, and better monitor these transactions. Additionally, understanding the size of informal remittances is essential for combating financial crimes like money laundering and ensuring that resources are used efficiently

Expansion, Fracturing, and Depoliticisation: UK government anti-trafficking funding from 2011 to 2023

Anti-trafficking policy discourses and funding trajectories in the UK are developing and expanding in a fractured way. This paper demonstrates that current policies and funding allocations primarily focus on supporting specific ‘victims’ and targeting indistinct ‘criminals’, rather than addressing the broader structural issues underlying human trafficking. This focus perpetuates ignorance of harm done at other scales. Supporting migrants who meet a narrow definition of ‘victims’ effaces how government-funded projects and agencies abuse migrants and exacerbate their vulnerability to exploitation. Anti-trafficking funding from the UK’s Official Development Assistance addresses both the individual and structural scales. However, structural problems are often framed as external, neglecting the impacts of UK policies that increase the vulnerability of migrants and low-paid or casualised workers. We also demonstrate that the UK government’s anti-trafficking discourse and funding are increasingly fractured along spatial lines, with a limited emphasis on the rights of exploited individuals outside the UK coinciding with attacks on the rights of migrants inside. Instead of narrow, depoliticised anti-trafficking discourses, it is vital to critique government policies that cause structural harm and amplify migrants’ vulnerability to exploitation. This could involve defunding certain government activities that increase vulnerabilities rather than merely expanding individual-level funding.

The economic impact of terrorism in South Asia

This study examines the economic impact of terrorism in South Asia. The region is currently home to 123 active terrorist/insurgent groups and is accountable for over 27 % of recorded global terrorist attacks. The annual data from the six most-terror-affected South Asian countries (Afghanistan, Bangladesh, India, Nepal, Pakistan, and Sri Lanka) during the US-led war on terror (2001 - 2022) is used. For econometric estimation, the five models: fixed-effect, generalized least squares (GLS), generalized estimating equation (GEE), quantile regression (QR), and panel-corrected standard errors (PCSE) are applied. Terror-related death (a proxy for human capital loss) and per capita income (a proxy for purchasing power) are considered to measure terrorism and its economic impact. In addition, four economic indicators (military expenditure, population, official development assistance (ODA), and USAID) and three institutional indicators (electoral democracy index, political violence index, and mobilization for autocracy index) are taken into account as control variables. The result suggests that every additional 886 terror-related human capital loss across the region significantly reduces the purchasing power of each South Asian person by at least 9.800 US dollars. Moreover, among the control variables, military expenditure, political violence, and mobilization for autocracy negatively affect per capita income, while electoral democracy, population, ODA, and USAID positively impact it. This study will also help understand the implications of the United Nations' Sustainable Development Goals (SDGs) agenda and achieving specific targets such as SDG 8 (promoting economic growth) and SDG 16 (promoting just, peaceful, and inclusive societies) based on the most terror-affected region.

Trade Outwardness and International Financial Flows in Nigeria

This study used the Autoregressive Distributed Lag model to investigate the impact of international financial flows on trade outwardness in Nigeria. With dataset covering the period 1999 – 2023 drawn from the World Development Indicator, which is a repository of the World Bank, official development assistance (ODA), Foreign portfolio investment (FPI) and foreign direct investment (FDI) were used as proxies for international financial flows. The quotient of the sum of export and import over gross domestic product represented trade outward which found to positively and significantly respond to changes in ODA and FPI and insignificantly and negative respond to FDI. It is recommended that trade outwardness should be tailored in the direction of international financial flows while harnessing the benefits of trade and mitigating the adverse effects of trade relations. This can be done through protective import strategies and export promotion methods.

Does official development assistance (ODA) cause the Dutch disease in developing countries

PurposeThis paper aims to investigate whether official development assistance (ODA) inflows to developing countries (lower-middle and low income) can cause the symptoms of Dutch disease or not.Design/methodology/approachThis study applies the methodology of dynamic panel data estimation with a one-step system generalized methods of moment (GMM) for the sample of 59 developing countries from 2001 to 2019.FindingsThe results indicate that ODA (as a percentage of gross domestic product (GDP)) rises by 1%, the real effective exchange rate (REER) appreciates by 0.252%. This finding reveals that these selected developing countries have faced the symptoms of Dutch disease. The countries with the higher ODA ratio have a higher effect of the Dutch disease, and the managed floating exchange rate regime is the lowest impacted, when compared to the fixed and flexible exchange rate.Practical implicationsThe selected countries are recommended to use ODA inflows right and efficiently. These ODA inflows should be invested in productive sectors or support for production rather than in consumption. The managed float exchange rate regime is applied to reduce the symptom of Dutch disease for the selected countries. The good cooperation of monetary and fiscal policies is important to absorb the huge ODA inflow and sterilize the adverse effects of the disease.Originality/valueThe paper contributes to the literature and empirical of the Dutch disease. An adverse effect of the huge ODA inflow to the developing countries appreciated of the real exchange rate and caused the symptom of the dutch disease.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-12-2022-0777

Can we define global collective action problems away?

AbstractThe adoption of the Sustainable Development Goals has rejuvenated an old debate: Can foreign aid be used to finance global public goods (GPGs)? There are those who see aid exclusively as a source of development funding for poor countries. And there are others who are open to answering the question in the affirmative. I put forward five arguments why the latter position is reasonable. Firstly, the formal definition of official development assistance (ODA) cannot be said to exclude its use in financing GPGs as these goods by definition benefit developing countries. Secondly, the amount of ODA provided has never been the gold standard of rich country effort envisaged by some. In particular, the level is boosted by the self‐interests of donors. Thirdly, there is ample precedent for following the benefit principle when it comes to multilateral organisations, which are often seen as GPGs. Fourthly, distinguishing between national public goods and GPGs is not always straightforward as the former are in many cases inputs into the production of the latter, and in such cases, the dividing line between ‘traditional aid’ and ‘funding for GPGs’ is blurred. Finally, it is not obvious in practice that aid as country finance always generates greater welfare gains for developing countries than the provision of GPGs. In sum, being overly normative with respect to what ODA is distracts us from the real problem, namely, that collective action problems result in too little spending on all international public goods, including poverty alleviation in poor countries.

Suggesting Priorities of Sustainable Development Goals Considering the Lingering Impacts of COVID-19

The Sustainable Development Goals (SDGs), aimed to be achieved by 2030, demand a more efficient approach for the remaining period due to the currently low achievement rate and the persisting impact of COVID-19. Consequently, this study analyzes United Nations statistics and previous studies to propose a global prioritization of SDGs. The arguments in each document were interpreted cross-sectionally with those of others. The analysis incorporates a simple system dynamics methodology and adds a national psychological and behavioral economic perspective. Among all SDGs, this study suggests that Goal 17 (Partnerships for the Goals) and ecosystem-related goals corresponding to Goals 13, 14, and 15 should be the foremost global priorities, given their capacity to establish the foundation for other goals. The general goals (Goals 1 to 9, 11, 12, and 16) and Goal 10 (Reduced Inequalities) follow as the subsequent priorities, fostering the most effective progression. The paper also suggests that among the targets of Goal 17, targets 17.2 (fully implement the commitment to Official Development Assistance), 17.18 (support available data to developing countries), and 17.11 (increase exports of developing countries) should be globally prioritized to focus on the economic recovery of developing countries in a short time. Furthermore, this study recommends that while each region maintains its local priorities, the international community should adhere to the global priorities presented. This alignment will lead to a worldwide virtuous circle—a structure where following each other's priorities helps resolve the next set of issues.

Application of Article 6-Linked Debt-for-Climate Swap for the Clean Energy Transition in Africa

This study presents an innovative financial model that integrates the debt-for-climate swap mechanism with Article 6 of the Paris Agreement, specifically designed to support Africa’s transition to clean energy. The model connects debt-for-climate swaps with the creation of internationally transferred mitigation outcomes (ITMOs), offering mutual benefits for both debtor and creditor nations. This approach aims to improve the debt sustainability of African countries while strengthening their climate resilience by combining Article 6 of the Paris Agreement with Official Development Assistance (ODA). Additionally, this model aligns with key Sustainable Development Goals (SDGs), including SDG 7 (Affordable and Clean Energy), SDG 13 (Climate Action), and SDG 17 (Partnerships for the Goals). Furthermore, the study proposes a restructuring of existing environmental safeguards by incorporating the “Do No Significant Harm” (DNSH) criteria and environmental contribution indicators to ensure alignment with the minimum safeguards mandated by Article 6 and international development standards. Through quantitative analysis, our findings indicate that the proposed debt-for-climate swap model could significantly contribute to Africa’s clean energy transition, address the region’s external debt challenges, and enhance climate resilience.

Finance arrangements and governance modes toward sustainable infrastructure: the case of urban railway projects in Manila, the Philippines

In recent years, the concept of sustainable infrastructure has gained popularity and is widely utilized and promoted by the international development community. However, implementation of sustainable infrastructure remains a challenge due to various enabling and disabling factors particularly related to financial arrangements and governance modes. This paper aims to fill the research gap in this area and investigate the factors that enable implementation of sustainable infrastructure, with a focus on the financial and governance aspects. To do so, the paper uses real urban railway projects in Manila, the Philippines as case studies for comparative analysis. The results suggest that from the finance and governance perspectives, public–private partnerships (PPPs) and official development assistance (ODA) finance are effective tools for implementing sustainable infrastructure, with some conditions, namely a mixture of vertical project management and horizontal process management, and the project environments having a positive effect on the trust building and collaboration among the stakeholders.

Redefining South Korean ODA (Official Development Assistance): How Technical Aid Emerges from its Contexts (1954-1965)

This paper considers the origins of South Korean ODA (official development assistance), working through the lens of KOICA’s (Korea International Cooperation Agency) two main predecessor institutions in the early 1960s. In contrast to KOICA (1991-prsent), associated with a rich Korea, this earlier period was dominated by small-scale efforts at outreach with neighboring countries, especially in Southeast Asia and Africa.In this context, two arguments emerge. First, Korean aid began earlier than is generally assumed, with the first outreach to African partners coming under discussion as early as 1960. Second, when the nation began its official in-country workshops a few years later, these were heavily influenced by the experiences Koreans had themselves undergone with the US in the form of “third-county training,” in which the US paired its partners to speed up the transfer of knowledge. In brief, Korean aid at its start point took place most frequently with new post-colonial partners, whether for diplomatic recognition, or for the exchange of knowledge, and went on to shape a new network as KODCO (Korean Overseas Development Corporation, 1965-1991) became a reality in the mid-1960s.

The threshold analysis of the Official Development Assistance (ODA), Foreign Direct Investment (FDI), and economic growth in selected African countries

There is a scarcity of research on the analysis of thresholds of official development assistance (ODA), foreign direct investment (FDI), and economic growth in Africa. Most of the studies focused on analysing the correlation between official development assistance (ODA) or foreign direct investment (FDI) and economic growth. This study stands out from others by adopting a comprehensive approach to analyse the threshold analysis of ODA, FDI, and economic growth in many countries on a continental scale. We examine the threshold for ODA, FDI, and economic growth by analysing annual data from 1980 to 2018 in 30 African countries. The primary method used for the estimation was the panel threshold regression approach. The threshold analysis test assessed the impact of ODA, FDI, and economic growth. The current study utilised threshold analysis and found a positive coefficient of 0.0620, indicating a favourable correlation between FDI and economic growth. On the contrary, the negative coefficient of 0.0683 shows a detrimental correlation between ODA and economic growth. Therefore, officials must enforce the level of ODA that is necessary to stimulate FDI and foster economic growth in Africa. Furthermore, it is crucial for authorities to implement a monitoring system to closely monitor these thresholds and adjust the policy accordingly in response to changing economic situations. The findings of this study will not only contribute to academic discourse, but will also provide vital perspectives for politicians, practitioners, enterprises, and foreign investors on how to effectively implement policies that stimulate economic growth and attract foreign investment in Africa. Furthermore, this study offers recommendations for further research in the domain of international capital flows.

Green economic growth, renewable energy and food security in Sub-Saharan Africa

This study examines the impact of green economic growth and renewable energy on food security in Sub-Saharan Africa (SSA). The rationale for the study comes from the background that with a fast rate of growing population, there is a high pressure on natural resources, which often leads to resource depletion, being experienced across the globe. This study utilises panel data analysis consisting of 37 SSA countries that are members of the Official Development Assistance (ODA). Data was obtained from the Food and Agriculture Organisation (FAO) and World Development Indicators (WDI) for the period 2005–2022. To control for endogeneity, the study applies the system Generalised Method of Moments (GMM). The result shows that renewable energy and green economic growth have a positive significant impact on food security, though this impact is asymmetric across SSA sub-regions. On the other hand, industrialisation through its emissions, contributes negatively to food security. The implication is that SSA countries should focus on policies aimed at improving green economic growth and renewable energy consumption; while policies aimed at reducing the inefficient adoption of renewable electricity and discouraging industrialisation aimed at suppressing agricultural practices should be adopted.

The Relationship Between Oda, Import–Export Turnover, and Vietnam’s Economic Growth During the Period 1995 – 2022 (SDG)

Objectives: This article studies the relationship between official development assistance (ODA), import-export turnover, and Vietnam’s economic growth during the period 1995–2022. Method: Using qualitative combined with quantitative research methods, based on the database collected by year from 1995 to 2022 from the website of the General Statistics Office, International Monetary Fund, Ministry of Finance, and World Bank...The database was analized by the Eview 12 Software. Results and Discussion: Vietnam’s economic growth depends on the operation of ODA budget solutions and total export turnover over time. ODA capital has a positive impact but is not as clear as total import-export turnover. In the first stage, when ODA capital rises, GDPR increases too, but in the later stages, continuing to increase ODA capital will not benefit the Vietnamese economy, while total export turnover has a positive effect on Vietnam’s economic growth for a long time. Research Implications: ODA capital only has a positive impact in the early stages when Vietnam enters the innovation phase, but in the later stages, international trade plays a more important role in Vietnam’s economic growth. Under the condition that other factors remain unchanged when total export turnover increases by 1%, GDPR increases by 0.416906%. Value: From the results of the analysis, the research team proposes solutions to selectively attract ODA, effectively use capital to ensure that infrastructure continues to be developed more modernly, and strengthen international trade activities to motivate sustainable economic growth.

Aid allocation across the humanitarian-development-peace nexus: the role of fragility as a donors’ motive

Fragility continues to present major challenges to achieving sustainable development goals (SDGs). International aid, particularly the Official Development Assistance (ODA), is a critical source of finance to deliver humanitarian assistance, development projects, and peace operations in fragile contexts. This study analyses if and how donors are motivated by fragility in their aid allocation across the humanitarian-development-peace nexus. Employing the random-effect Tobit method, the role of fragility as a donors’ motive is analysed alongside three conventional categories of motives: self-interest, recipients’ needs, and merit. The empirical analysis demonstrates an association between aid allocation across the nexus and fragility, but also a great degree of heterogeneity depending on the donor and the pillar of the nexus. It also detects a significant difference between how the state of fragility correlates with aid allocation and how the degree of fragility does so.

The targeting of ODA by Central and Eastern European EU donors

ABSTRACT The study analyses the allocation of Official Development Assistance (ODA) by those Central and Eastern European (CEE) donors that are also members of the EU. Using both absolute and relative data from the OECD and UNDP databases for each recipient country, we have established a general trend in CEE EU countries aid provision and identified cases of exceptional donor engagement. The main axis of the study is the analysis of the ODA/HDI ratio, focusing on flows in 2021 and then on 2013–2021 to establish the long-term trend. The result is a positive correlation between the volume of aid provided and the HDI score in each of the perspectives considered. This leads to a surprising trend of increasing aid activity by CEE EU donors as the level of development of the recipient countries improves. The results of the data analysis and the conclusions drawn from the literature suggest that the distribution of CEE EU ODA is much closer to a donor interest model. However, it is possible that this trend may gradually evolve towards a hybrid model, given the surge in ODA spending following the outbreak of the Russia-Ukraine war and increasing external pressure.