The purpose of this paper is to investigate the main determinants of dependency on food aid programmes. Food aid may take the form of a loan, a sale below market price or a current transfer. Food aid programmes across the globe are generally designed to provide short‐term assistance to countries. However, many countries have developed a dependence on food aid assistance.
The paper estimates cross‐sectional regressions using a database containing 116 developing countries over the period 1970‐2003. Bayesian averaging of classical estimates is employed to identify the robust determinants of dependency.
The study finds that the top two determinants of food aid dependence (both cereals and non‐cereals) were food production and the frequency of droughts affecting the country. Food inflation, population density, crop yields, the amount of arable land per capita, the rule of law and the number of armed conflicts were also robustly related to aid dependence.
These findings suggest that international donors should focus primarily on offsetting the substitution effect of aid on local production as well as implement systems to partially offset the negative effects of droughts, if they are to break the cycle of dependence on food aid.
Previous studies have investigated the effects of a large number of other variables. The findings from these papers were somewhat conflicting due to differences in model specification. To identify the variables that have a robust relationship with food aid dependence, whatever the model specification, the Bayesian averaging of classical estimates approach proposed by Sala‐i‐Martin et al. is employed.
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