Inertia and Herding in Humanitarian Aid Decisions
Using panel data for the period 1995-2008, we model the aid allocation decisions of the three largest official donors of humanitarian aid: the United States government, the United Kingdom government and the European Commission. We find evidence that donor decisions depend on both the recipient’s need and the donor’s economic interest, but with marked asymmetries in the relative importance of different factors across the three donors. Moreover, some donors exhibit much more inertia than others in responding to new areas of need, and some are much more influenced by the decisions of other donors. Despite being a relatively small donor, the United Kingdom is particularly influential.
Publisher: Department of Economics, University of Otago
Series number: 1009
Keywords: Humanitarian aid; Dynamic panel model
Research Type: Discussion Paper