Political econometry of official development assistance

This paper attempts to devise a statistical model that sheds light on the political decision-making process regarding the allocation of aid. The author uses multiple-regression techniques in trying to explain the annual amount of aid donated by a group of developed countries. The results suggest that donor countries' aid decision reflect, among other factors, a range of macroeconomic indicators including unemployment, balance-of-payments position, the central budget and the rate of growth of GNP. These results indicate some possible factors that might influence what is ultimately a political decision.