Country selection and aid allocation: A case of the Czech Republic

University of Economics in Prague, Faculty of International Relations, Department of World Economy, nám. Winstona Churchila 1938/4, 130 67 Praha 3 – Žižkov, Czech Republic

^* Corresponding author: xdufg00@vse.cz

Abstract

Research background: Donors provide development aid from various reasons: while some of them might give aid based on the recipient´s needs, some countries pursue their own agendas with their development programmes. Visegrad Group countries are mostly considered as egoistic donors that try to support security in the East European region and promote their trade.

Purpose of the article: This article draws back on the existing literature that focused on the motives behind the Czech development aid and examines influence of both egoistic and altruistic variables to determine which of these variables are important for the selection of countries to the aid portfolio and the allocation of aid funds. The researched variables are: number of asylum seekers, debt to the Czech Republic, Czech exports, unemployment in the developing countries, political and civil rights, and enrolment to the secondary education.

Methods: Probit-tobit analysis and a generalized linear model are employed in this paper.

Findings & Value added: The results suggest that egoistic economic motives (debt and Czech exports) are important factors for both country selection and aid allocation, while the number of asylum seekers affects only the aid allocation. As per the altruistic reasons, the country selection depends on the unemployment rates, political and civil rights and the enrolment to secondary education. The aid allocation depends also on the unemployment rates, political and civil rights, and the ratio of girls enrolled to the secondary education.