A Signal of Altruistic Motivation for Foreign Aid

We develop a stylized theoretical model showing that countercyclical transfers from a wealthy donor to a poorer recipient generate a signal of altruistic donor motivation. Applying the model to OECD foreign aid (ODA) data we find the signal present in approximately one-sixth of a large set of donor–...

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Veröffentlicht in:The B.E. journal of economic analysis & policy 2016-10, Vol.16 (4), p.1-31
Hauptverfasser: Civelli, Andrea, Horowitz, Andrew W., Teixeira, Arilton
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Horowitz, Andrew W.
Teixeira, Arilton
description We develop a stylized theoretical model showing that countercyclical transfers from a wealthy donor to a poorer recipient generate a signal of altruistic donor motivation. Applying the model to OECD foreign aid (ODA) data we find the signal present in approximately one-sixth of a large set of donor–recipient pairs. We then undertake two out-of-model exercises to validate the signal: a logit regression of signal determinants and the growth effects of ODA from signal-positive pairs are compared to non-signal bearers. The logit indicates our signal meaningfully distinguishes donor–recipient pairs by characteristics typically associated with altruism. The growth exercise shows ODA from signal bearers displays stronger reverse causation and more positive long-run effects. Beyond foreign aid, our signal of altruistic motivation may be applicable to a wide range of voluntary transfers.
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1935-1682
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source De Gruyter journals
subjects Altruism
bilateral aid
Causality
Comparative analysis
donor motivation
F34
F35
Foreign aid
Growth models
Motivation
O11
O19
O47
Regression analysis
Validation studies
title A Signal of Altruistic Motivation for Foreign Aid
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