Determinants of official benefit-oriented aid to developing countries

Abstract

The article presents the pioneer cross-country study results of the formation factors of benefit-oriented official development assistance (ODA), which is defined as aid sent by a donor disinterestedly and in order to improve the welfare of the recipient. In the preliminary data review an original measure of benefit-oriented assistance is proposed, which allows to study transfers in conditions of mixing motives. Subsequent regression analysis of panel data on 18 donors of the Organization for Economic Co-operation and Development for 2010–2019 shows that a benefit-oriented motive is primarily ensured by a high degree of trust, the prevalence of altruistic behavior in society and the socio-economic welfare of the donor country. There is evidence to suggest that ancillary factors of disinterested assistance are the democratic government structure, tolerance and life satisfaction; in addition, political participation as a factor of altruism has an indirect effect on the motivation of the donor. Calculations also show that an increase in the per capita GDP of the donor can contribute to both benefit-oriented and selfish motives of ODA, while other factors do not demonstrate a similar integral effect. The results obtained confirm and clarify the theoretical conclusions of the philosophy of collaboration regarding the genesis and dissemination of collaborative relationships. These findings can be used to improve the principles and mechanisms of international assistance as well as to forecast the dynamics of benefit-oriented transfers.