Clarifying the Foreign Aid Puzzle: A Comparison of American, Japanese, French, and Swedish Aid Flows

Abstract

This study explores the donor side of debates revolving around the proper role of foreign assistance as a foreign policy tool, by empirically testing for the aid determinants of four industrial democracies: France, Japan, Sweden, and the United States. A pooled cross-sectional time-series design is employed to assess the impacts of six sets of variables on aidflowsto thirty-six African states during the 1980s. Three sets of these variables—humanitarian need, strategic importance, and economic potential—are constructed using data traditionally employed in empirical foreign aid studies. Three additional sets of variables—cultural similarity, ideological stance, and region—are constructed from data that regional specialists consider to be important in the foreign aid equation. Although no two cases are alike, one can nevertheless draw some tentative conclusions about the nature of the foreign aid regime of the final cold war decade of the 1980s on the basis of several cross-national patterns. In short, the results (1) contradict rhetorical statements of northern policymakers who claim that foreign aid serves as an altruistic foreign policy tool designed to relieve humanitarian suffering; (2) confirm the expected importance of strategic and ideological factors in a foreign aid regime heavily influenced by the cold war; and (3) underscore the importance of economic, particularly trade, interests in northern aid calculations.