By Sarah Bermeo – The self-interest of developed countries affected policy on foreign aid, trade agreements, and even climate finance, as I argue in my new book, Targeted Development.
Targeting foreign aid to areas where potential spillovers to the donor are high is not only the practice of great powers.
Australia, Austria, Canada, Denmark, Finland, Germany, Italy, Japan, the Netherlands, New Zealand, Sweden, and Switzerland have all favored more proximate countries in the post-2001 period—when you control for measures of need such as income, disasters, and civil war.
For Australia, Austria, Denmark, France, Japan, the Netherlands, New Zealand, Norway, and Sweden, aid is also associated with bilateral migrant flows.
The more a donor imports from a developing country, the higher aid flows are to that country; this is especially true for Austria, Canada, Denmark, Finland, Japan, Norway, Sweden, and the United Kingdom.
For states not targeted, however, the picture is bleak.
Where migration—and hence remittances—is low, foreign aid will also be low. When foreign aid is low, the chances of being granted preferential access to wealthy country markets is lower too.
Where geographic distance is great, economic engagement will lag behind. more>