Building a brand

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Foreign Aid by Nordic CountriesWhat
specificities?Is it more effective?
Stanislas de GMELINE Deepti SURESH Mohamed
TOUKOUROU
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Outline

• Why would it be different?

What are the patterns of Nordic aid?
What does the numerical data tell us?
How to achieve aid effectiveness? Denmarks case
Summary
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Aid allocation policies
Various objectives for international aid agencies
DEEPTI ? MOHAMED ? STANISLAS
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Outline

• DENMARK
• Population 5.4 million
• Religion mostly Evangelical Lutheran (95)
• Government type Constitutional Monarchy
• Capital Copenhagen
• 2006 GDP (PPP) 198.5 bn
• GDP per capita 37,000
• GDP growth rate 3
• Unemployment rate 3.8
• Public Budget 147 bn
• Public Debt 28.1 of GDP

FINLAND Population 5.2 million Religion mostly
Lutheran (84) Government type Republic Capital
Helsinki 2006 GDP (PPP) 171.7 bn GDP per
capita 32,800 GDP growth rate
4.9 Unemployment rate 7 Public Budget 105.6
bn Public Debt 37.7 of GDP
NORWAY Population 4.6 million Religion mostly
Protestant Government type Constitutional
Monarchy Capital Oslo 2006 GDP (PPP) 207.3
bn GDP per capita 47,800 GDP growth rate
3 Unemployment rate 3.5 Public Budget 195.8
bn Public Debt 44.8 of GDP
SWEDEN Population 9 million Religion mostly
Lutheran Government type Constitutional
Monarchy Capital Stockholm 2006 GDP (PPP)
285.1 bn GDP per capita 31,600 GDP growth
rate 4.2 Unemployment rate 5.6 Public Budget
222 bn Public Debt 46.4 of GDP
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Why would it be different?

• Political and historical causes

Unlike other European countries such as France
or the UK, none of the Nordic countries have a
colonial legacy
Due to their relatively modest position on the
international exchequer, none of these countries
might be incentivised by foreign policy reasons
They all have a tradition of social democratic
welfare with high emphasis put on social
spending. As such, their foreign aid can be seen
as a natural extension of such principles
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What are the patterns of Nordic Aid?

• How much do Nordic countries give?

Nordic countries are more generous
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What are the patterns of Nordic Aid?
Recipients? Criteria?

• Nordic aid is targeted to the poorest countries,
  favouring open economies and democracies
  generally in Sub-Saharan Africa
• One slight exception may be Finland, which more
  recently has provided more aid to recipients in
  its region (mainly Russia and Estonia) rather
  than to very poor developing countries
• Nordic aid has been known for a strong emphasis
  on poverty reduction through human development
• Recipients with a good human rights record
  receive more aid from Nordic donors
• Nordic aid is generally of much less political
  and economic significance

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Which countries do they give to?
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What are the patterns of Nordic Aid?
How?
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What do numerical data tell us?

• Regression analysis conclusions

NO effect of income
Democracy and respect of human rights are
determinant factors
Countries with close trade policies receive more
aid
Nordic Countries do not favor political allies
contrary to major donors
Large countries receive more aid
UN voting behavior does not matter
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How to achieve aid effectiveness? - Denmark
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Summary

• Nordic countries have a different approach to
  development aid
• Differences exist among them
• Can other donors do the same?
• Yes
• Will they?
• Probably no
• The 2 largest recipients of foreign aid from 1980
  until recently Israel and Egypt in 2002, it was
  Iraq!!!

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QA
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References

• Scott Gates, Anke Hoeffler. 2004. Global Aid
  Allocation Are Nordic donors different?,
  Working paper, Center for the Study of African
  Economies
• Alesina, A. D. Dollar. 2000. Who gives foreign
  aid to whom and why?, Journal of Economic
  Growth 5 33-63
• Steven Radelet. 2006. A primer on foreign
  aid, Working paper 92, Center for Global
  Development
• http//www.oecd.org
• Danish development assistances, DANIDA, annual
  report 2005

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