Colonial Legacy and Foreign Aid: Decomposing the Colonial Bias

Daina Chiba and Tobias Heinrich

International Interactions, 2019, vol. 45, issue 3, 474-499

Abstract: It is well-known that donors give considerably more foreign aid to former colonies than to countries lacking past colonial ties. Unfortunately, we know relatively little about why this is the case. For one, there is almost never a theoretical justification for the inclusion of colonial history in statistical models. For the other, the only explicitly made rationale by Bueno de Mesquita and Smith (2009) actually predicts an interpretational problem: colonial history not only increases a former colony’s saliency to the donor, but also has left deep marks on recipients’ social and political institutions today. Both aspects shape how much aid a donor transfers to the recipient. This leaves ambiguous the meaning of the routinely found positive, sizable, and significant coefficient of colonial history on aid flows. We solve the inferential quandary by using a decomposition approach from labor econometrics. Our results show that about 75–100% of the colony effect on foreign aid stems from the greater saliency that donors give to policy concessions from former colonies.

Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1080/03050629.2019.1593834 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:ginixx:v:45:y:2019:i:3:p:474-499

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/GINI20

DOI: 10.1080/03050629.2019.1593834

Access Statistics for this article

International Interactions is currently edited by Michael Colaresi and Gerald Schneider

More articles in International Interactions from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().