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.Hypotheses 2.Data 3.Method 4.Results 5.Conclusion

Why this research ? NGOs are the new aid giants –26 billion US dollar in 2005 (OECD)(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)(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 largest international NGOs were invited to provide data; 61 did: 2.Total budget of NGOs in the sample: appr. 7 billion €

Top recipients

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 explained Governance determinant: rejected NGOs do not work more in countries with poor governance Back-donor preferences: accepted NGOs become (more) active in countries where backdonors are active (but not susceptible to other donor interests). Concentration determinant: acceptedaccepted NGOs become (more) active in countries where other NGOs are active Likemindedness determinant: accepted NGOs 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 ?

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)annually