Felipe Starosta de Waldemar attended the 4th DIAL Conference on Development Economics held at the University of Paris-Dauphine, on June 29 and 30th 2017.  He presented “Donor National Interests or Recipient Needs? Evidence from EU Multinational Tender Procedures on Foreign Aid”.
Abstract:  Official development assistance provided bilaterally by donor countries usually combines  altruistic and self-interest motives. This paper explores if these traditional determinants of  bilateral foreign aid also have an impact on the allocation of projects centrally administered by the European Union through a public procurement process. We examine if companies of a specific nationality obtain systematically more projects in recipient countries where its nationality has more commercial and historical ties. We use data from the European Union for the period 2010-2014 and we build bilateral measures of the total amount of aid obtained by enterprises from countries belonging to the OECD’s Development Assistance Committee. These projects are either financed by the European Commission Budget or the 10th European Development Fund. We find that bilateral exports and common language are a strong determinant of the value of multilateral projects, while recipients’ need have a weak effect. These results are robust to different estimation methods and other possible determinants of bilateral aid. However, we do not find heterogeneous effects concerning different groups of countries. Companies from countries with commercial and language connections with recipient nations consistently secure more projects in these regions.