Aid Motivation and Donor Behavior

2007 ◽  
Vol 5 (1) ◽  
Author(s):  
Shyam Nath ◽  
Keyword(s):  
Income Distribution ◽  
Utility Function ◽  
Foreign Aid ◽  
Utility Maximization ◽  
Analytical Framework ◽  
Budget Constraint ◽  
Aid Allocation ◽  
Donor Behavior ◽  
Trade Performance

This paper develops an analytical framework to explain foreign aid motivation and donor behavior, using an interdependent utility maximization framework, in which donor faces two constraints; its own budget constraint and the recipient's utility function. This paper specifically contributes to the literature on foreign aid by integrating the various objectives underlying aid allocation, namely recipient income and trade performance, international income distribution and donor reaction to fungibility. Between trade interest and international income distribution, the former is found to be a more common consideration in aid allocation. One of the important results is that the fungibility of foreign aid is established as a major problem so as to invite donor’s retaliation. However, the retaliatory response appears to co-exist with other motivations.

scholarly journals Issues in Pesticide Policy: Discussion

1992 ◽  
Vol 21 (2) ◽  
pp. 93-95 ◽  
Author(s):  
David G. Abler
Keyword(s):  
Utility Function ◽  
Utility Maximization ◽  
Budget Constraint ◽  
Neoclassical Economics ◽  
Demand Curves ◽  
Policy Discussion ◽  
Observed Behavior

The paper by Taylor has merit because it is provocative, but like many things, this can be overdone. His self-described diatribe against neoclassical economics is in special need of a response. He appears to dismiss the notion of utility maximization, but in fact there is nothing to dismiss. Although many economists do not realize this fact, the assumption of utility maximization is not testable. Give me any pattern of behavior by an individual (or a society) and I can give you a utility function which, when maximized subject to whatever constraints that person or society may face, yields the observed behavior. An obvious example would be U = 1 for the observed behavior and U = 0 otherwise, although more complicated examples could also be constructed. The power of economics lies not in utility maximization, but in the specification of constraints on choice and in describing how changes in the constraints affect behavior. To illustrate, even a consumer who made decisions randomly would tend to have downward-sloping demand curves because of his or her budget constraint (Becker).

Foreign aid allocation, governance, and economic growth Synopsis

2012 ◽  
Author(s):  
International Food Policy Research Institute (IFPRI)
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Aid Allocation

scholarly journals Comparing utility functions between risky and riskless choice in rhesus monkeys

2021 ◽  
Author(s):  
Philipe M. Bujold ◽  
Simone Ferrari-Toniolo ◽  
Leo Chi U Seak ◽  
Wolfram Schultz
Keyword(s):  
Utility Function ◽  
Utility Theory ◽  
Utility Maximization ◽  
Choice Behavior ◽  
Expected Utility Theory ◽  
Utility Functions ◽  
Random Utility Maximization ◽  
Risky Choices ◽  
Neuronal Mechanisms ◽  
Subjective Value

AbstractDecisions can be risky or riskless, depending on the outcomes of the choice. Expected Utility Theory describes risky choices as a utility maximization process: we choose the option with the highest subjective value (utility), which we compute considering both the option’s value and its associated risk. According to the random utility maximization framework, riskless choices could also be based on a utility measure. Neuronal mechanisms of utility-based choice may thus be common to both risky and riskless choices. This assumption would require the existence of a utility function that accounts for both risky and riskless decisions. Here, we investigated whether the choice behavior of macaque monkeys in riskless and risky decisions could be described by a common underlying utility function. We found that the utility functions elicited in the two choice scenarios were different from each other, even after taking into account the contribution of subjective probability weighting. Our results suggest that distinct utility representations exist for riskless and risky choices, which could reflect distinct neuronal representations of the utility quantities, or distinct brain mechanisms for risky and riskless choices. The different utility functions should be taken into account in neuronal investigations of utility-based choice.

New Donors, New Goals? Altruism, Self-Interest, and Domestic Political Support in Development Cooperation in Latin America

2021 ◽  
Vol 63 (4) ◽  
pp. 45-73
Author(s):  
Gino Pauselli
Keyword(s):  
Latin America ◽  
Foreign Aid ◽  
Domestic Politics ◽  
Political Support ◽  
Civil Society Organizations ◽  
Development Cooperation ◽  
Time Data ◽  
Aid Allocation ◽  
Predictive Strength ◽  
First Time

ABSTRACTThe literature on aid allocation shows that many factors influence donors’ decision to provide aid. However, our knowledge about foreign aid allocation is based on traditional foreign aid, from developed to developing countries, and many assumptions of these theories do not hold when applied to southern donors. This article argues that south-south development cooperation (SSDC) can be explained by the strength of development cooperation’s domestic allies and foes. Specifically, it identifies civil society organizations as allies of SSDC and nationalist groups as opponents of SSDC. By using for the first time data on SSDC activities in Latin America, this article shows the predictive strength of a liberal domestic politics approach in comparison to the predictive power of alternative explanations. The results speak to scholars of both traditional foreign aid and south-south development cooperation in highlighting the limits of traditional theories of foreign aid motivations.

scholarly journals Modeling Efficiency of Foreign Aid Allocation in Malawi

2018 ◽  
Vol 73 (4) ◽  
pp. 385-399
Author(s):  
Philip A. White ◽  
Candace Berrett ◽  
E. Shannon Neeley-Tass ◽  
Michael G. Findley
Keyword(s):  
Foreign Aid ◽  
Aid Allocation

scholarly journals China's and Japan's Foreign Aid Policies vis-à-vis Lusophone Africa

2015 ◽  
Vol 50 (3) ◽  
pp. 49-79 ◽  
Author(s):  
Pedro Miguel Amakasu Raposo de Medeiros Carvalho
Keyword(s):  
Foreign Aid ◽  
Development Assistance ◽  
Human Security ◽  
Local Communities ◽  
Poverty Eradication ◽  
African Countries ◽  
Aid Allocation ◽  
Foreign Policies ◽  
Trade And Investment ◽  
Model Approach

This article compares the evolution of China's and Japan's foreign policies to Lusophone Africa, focusing on the period post-2000. The lack of analysis on Beijing's and Tokyo's respective aid policies towards Portuguese-speaking African countries (Países Africanos de Língua Oficial Portuguesa, PALOP) makes this study relevant. Arguably, Japan's development “edge” over China in terms of the “aid model” approach towards PALOP countries is under threat. This raises questions about China's changing pattern of aid, characterised by an increasing amount of “soft” aid towards PALOP states outside of trade and investment relations, which is much in line with Japan's aid philosophy and, according to observers, less neocolonialist than Japan's previous aid practices. This paper asks which model of cooperation is morally better and which is more effective, as both donors have interests in PALOP countries beyond development assistance. It finds complementarities in the two countries’ aid allocation to PALOP states, such as poverty eradication given the sectoral diversity of Chinese aid, and the empowerment of local communities fostered by Japanese aid's emphasis on grassroots and human-security projects.

Motivations for Bilateral Aid Allocation in Korea: Humanitarian, Commercial, or Diplomatic?

2015 ◽  
Vol 14 (1) ◽  
pp. 180-197
Author(s):  
Bokyeong Park ◽  
Hongshik Lee
Keyword(s):  
Foreign Aid ◽  
Aid Effectiveness ◽  
Allocation Rule ◽  
National Interests ◽  
Aid Allocation ◽  
Bilateral Aid ◽  
External Pressures ◽  
Overseas Investment ◽  
Over Time ◽  
Resource Security

This study investigates Korea's motivations for foreign aid allocation, analyzing panel data from over 180 countries for the last 20 years. The results show that Korea's aid allocation reflects both recipient needs and Korea's own national interests but does not consistently consider aid effectiveness. Korean aid is also characterized by its use as an instrument of both summit diplomacy and resource security. In addition, its commercial motivations appear to have shifted over time, from export promotion to overseas investment support. Despite internal and external pressures, there is no obvious evidence that Korea's allocation rule converges with international guidelines that recommend greater consideration of recipient needs and aid effectiveness and less consideration of donor interests.

scholarly journals Foreign Aid Allocation Tactics and Democratic Change in Africa

2015 ◽  
Vol 77 (1) ◽  
pp. 216-234 ◽  
Author(s):  
Simone Dietrich ◽  
Joseph Wright
Keyword(s):  
Foreign Aid ◽  
Aid Allocation ◽  
Democratic Change
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