National culture and the distribution of foreign aid

Abstract

This paper investigates the relationship between a country’s national culture and the level of aid it grants to other countries. We rely on Hofstede’s culture framework to quantify national culture and find that national culture and aid are significantly related. Specifically, we show that countries having high power distance, high masculinity and high uncertainty avoidance cultures appear to refrain from engaging in foreign assistance programmes. On the other hand, high individualistic-culture countries tend to provide greater levels of foreign aid. Overall, the results imply that national culture matters in shaping the donation behaviour of aid providers.