Leading by example: Do the biggest and most generous donors influence others to give more health aid?

Amy Beech (School of Economics, University of Queensland, Brisbane, Australia.)
Do Won Kwak (School of Economics, University of Queensland, Brisbane, Australia.)
Kam Ki Tang (School of Economics, University of Queensland, Brisbane, Australia.)

International Journal of Social Economics

ISSN: 0306-8293

Publication date: 12 January 2015

Abstract

Purpose

The purpose of this paper is to explore the interdependence between donor countries’ health aid expenditures. The specific form of interdependence considered is the leader effect, whereby an influential country has a positive leverage effect on other donor countries’ aid expenditure. The opposite case of a free-rider effect, whereby a single donor country has a negative leverage effect on its peers, is also considered.

Design/methodology/approach

Focusing on the identification of the leader effect avoids the estimation bias present in the identification of the peer group effect, due to endogenous social effect. The empirical analysis focuses on Development Assistance for Health provided by 20 OECD countries over the period of 1990-2009. Aid commitment and aid disbursement are distinguished.

Findings

When aid dynamics, country heterogeneity, and endogeneity are accounted for, there is no evidence that the biggest donor – the USA, or the most generous donors – Norway and Sweden, exhibit any leverage effects on other donor countries’ aid expenditures.

Originality/value

This is the first paper to examine the leader and free-rider effects in health aid provision as previous studies focus on peer effects. Any evidence of leader or free-rider effects (or the lack of it) adds to the understanding of international political economy especially in the area of foreign aid provision.

Keywords

Citation

Beech, A., Kwak, D.W. and Tang, K.K. (2015), "Leading by example: Do the biggest and most generous donors influence others to give more health aid?", International Journal of Social Economics, Vol. 42 No. 1, pp. 19-32. https://doi.org/10.1108/IJSE-08-2013-0181

Publisher

:

Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited

To read the full version of this content please select one of the options below

You may be able to access this content by logging in via Shibboleth, Open Athens or with your Emerald account.
To rent this content from Deepdyve, please click the button.
If you think you should have access to this content, click the button to contact our support team.