Monday, December 20, 2010

What determines food aid to developing countries?

Nathan Nunn and Nancy Qian argue that food aid is determined by recipient country’s food shortages. But, food aid from some of the largest donors is the least responsive to production shocks in recipient countries. Also, food aid usually goes to counties with colonial ties.


We examine the supply-side and demand-side determinants of global bilateral food aid shipments between 1971 and 2008. First, we find that domestic food production in developing countries is negatively correlated with subsequent food aid receipts, suggesting that food aid receipt is partly driven by local food shortages. Interestingly, food aid from some of the largest donors is the least responsive to production shocks in recipient countries. Second, we show that U.S. food aid is partly driven by domestic production surpluses, whereas former colonial ties are an important determinant for European countries. Third, amongst recipients, former colonial ties are especially important for African countries. Finally, aid flows to countries with former colonial ties are less responsive to recipient production, especially for African countries.


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