Blind spots on the aid map: clustering & other curious geographic choices of NGOs

DANISH INSTITUTE FOR INTERNATIONAL

STUDIES

MAY 19, 2008

Dirk-Jan Koch, Axel Dreher,

Peter Nunnenkamp and Rainer Thiele

Set-up of presentation

1. Hypotheses2. Data3. Method4. Results5. Conclusion

Why this research ?

• NGOs are the new aid giants – 26 billion US dollar in 2005 (OECD)

• Many studies on geographic choices – of NGOs within countries;– of other aid actors;– but not on NGO choices between countries.

• Between country differences are substantial • Why quantitative approach ?

– Exploratory chapter of larger research;– NGOs operate within resource transfer

paradigm.

• NGOs are the new aid giants – 26 billion US dollar in 2005 (OECD)

• Many studies on geographic choices – of NGOs within countries;– of other aid actors;– but not on NGO choices between countries.

• Between country differences are substantial • Why quantitative approach ?

– Exploratory chapter of larger research;– NGOs operate within resource transfer

paradigm.

Hypothesis 1: Poverty

NGO aid is focused on the needy countries (economic and social dimension of poverty, both in relative and/or absolute terms, such as assessed by GDP, HDI or GINI)

Hypothesis 2: Governance

NGOs are relatively strongly engaged in countries with weak institutions in order to exploit their comparative advantage of working in “difficult” environments

(on technical and political aspects as assessed by Freedom House Indicators, Kaufmann indicators and Polity IV democracy measures)

Hypothesis 3: Back-donor preferences

The preferences of official backdonors affect the allocation of NGO aid. Yet NGOs are not affected by geo-political interests of backdonors

(backdonor preferences assessed by aid flows, geo-political interests by trade to recipient counties and UN General Assembly Voting)

Hypothesis 4: Concentration

Hypothesis 4: NGOs locate where other NGOs are active.

(assessed by the numbers of other international NGOs that are active in the country and the amounts those other NGOs disburse)

Hypothesis 5: Likemindedness

Hypothesis 5: NGOs are more strongly engaged in countries characterized by similarities with their own organization.

(assessed by religious and colonial matches)

Data

1. 100 largest international NGOs were invited to provide data; 61 did:

2. Total budget of NGOs in the sample: appr. 7 billion €

0.0

2.0

4.0

6M

ean

of N

GO

aid

per

cap

ita

Africa Asia Middle East Latin America Europe

in Euro in 2005NGO aid per capita per continent

0.0

2.0

4.0

6M

ean

of N

GO

aid

per

cap

ita

LDC OLIC LMIC UMICLDC = Least Developed,OLIC = Other Low Income,LMIC = Lower Middle Income,UMIC, Upper Middle Income

in Euro in 2005NGO aid per capita

Top recipients

* Indicates that a country was labelled a Least Developed Country by the OECD/ DAC in 2005

International NGO expenditures in million Euro (2005)

International NGO expenditures in Euro per capita (2005)

India 262 Palestine 12,3 Ethiopia* 175 Lesotho* 11,4 Sudan* 150 Zimbabwe 9,7 Indonesia 135 Nicaragua 9,1 Kenya 126 Haiti* 8,8 Zimbabwe 126 Swaziland 8,3 Bangladesh* 118 Zambia* 7,6 Uganda* 109 Malawi* 7,3 Sri Lanka 95 Honduras 6,7 Malawi* 93 El Salvador 6,6

Methods

Multivariate regression analysis • What determines if NGOs become active in a

country?• What determines how active NGOs become in

a country ?

Results regarding poverty focus not clearcut• NGOs do not consider levels of poverty when

deciding on becoming active in a country.• NGOs do consider poverty when determining

level of intervention in a country (1% increase in GDP leads to a decrease of 0.15% of aid)

Strong results: 75% of choices can be explainedGovernance determinant: rejectedNGOs do not work more in countries with poor governanceBack-donor preferences: acceptedNGOs become (more) active in countries where backdonors are active (but not susceptible to other donor interests).Concentration determinant: accepted NGOs become (more) active in countries where other NGOs are activeLikemindedness determinant: acceptedNGOs become active in those countries with which they share key-characteristics.

Conclusion

• Good news:– Some poverty targeting– Not influenced by geo-strategic interests.

• Bad news:– Concentration– Donor led behavior– Likemindedness determines NGO choices

Questions, comments ?

d.koch@maw.ru.nl

NGO donor darlings (e.g. Guatemala, Kenya, Malawi and Sri Lanka, Zambia and Uganda) receive > 100 million USD annually

NGO donor orphans (e.g. Côte d’Ivoire, Congo-Brazzaville, Guinea, Yemen and CAR receive < 10 million USD annually)