Why do some donor countries allocate a higher percentage of their income to Official Development Assistance (ODA) compared to others? Similarly, why do Northern European countries exceed the suggested international norm of 0.7% for ODA allocation? Despite recognizing that donor countries pursue diverse objectives through ODA, we still lack a comprehensive understanding of which objectives positively correlate with a higher ODA-to-income ratio. For instance, we cannot definitively conclude that donor countries prioritizing humanitarian goals through ODA consistently allocate a larger proportion of their income to such efforts compared to countries emphasizing specific national interests.
The reasons for this complexity are manifold. First, donor countries typically have multifaceted ODA objectives, encompassing both humanitarian and national interest goals (Maizels and Nissanke, 1984). Rarely do we find donor countries exclusively allocating ODA for humanitarian or national interest purposes. Many donor countries justify their ODA allocation by combining enlightened self-interest with moral and ethical considerations (Anand, 2004; Gulrajani, 2017). Thus, motivations for ODA giving remain mixed across donor countries.
Second, security, political, and economic interests associated with ODA do not necessarily result in a higher or lower ODA-to-income ratio among donor countries. Third, donor countries operate within distinct international contexts across different time periods, leading to shifts in their ODA objectives. For example, in numerous European countries, the recent refugee crises have prompted increased ODA spending on addressing indoor refugee-related issues compared to previous periods (Knoll and Sheriff, 2017).
While it is commonly assumed that the income level and government budgetary capacity of donor countries influence their ODA/GNI ratio, these variables alone cannot account for all the variations observed in this ratio. Furthermore, the ODA/GNI ratio of donor countries has exhibited significant fluctuations over different time periods. For instance, in 1970, Australia, France, and the United States reported ODA/GNI ratios of 0.62, 0.52, and 0.32, respectively. However, by 2016, these ratios for the same countries had decreased to 0.27, 0.38, and 0.19, as reported by the OECD.
Despite the United Nations' and OECD's long-standing consensus on an international target of 0.7% for the ODA/GNI ratio since the 1970s, only a handful of Northern European donor countries have managed to meet this target. Most other donor countries lag significantly behind the agreed-upon goal. This wide variation in the ODA/GNI ratio across donor countries has sparked a compelling research question: why do some countries allocate a considerably higher percentage of their income to ODA compared to their peers? This puzzle is intriguing for several reasons.
Firstly, ODA funds are derived from tax revenues and public expenditures of donor countries. Crafting ODA allocation policies involves a careful selection process against alternative public spending options, considering economic and budgetary constraints. Given the recent increase in national debt and declining economic growth rates in many donor countries, discerning the underlying reasons for why some donor countries allocate a larger share of their income to ODA is challenging. Secondly, despite economic recessions and fluctuations affecting overall public spending in donor countries, these factors have not led to abrupt changes in the ODA/GNI ratio for many of them. Similarly, shifts from conservative to liberal political regimes and vice versa in donor countries have not resulted in rapid shifts in ODA policies or ODA/GNI ratio. Power transitions between political ideologies are expected to yield different policy preferences and, consequently, alterations in public spending behaviors. The relative stability in ODA allocation policies across many donor countries is somewhat surprising. A possible explanation could be the relatively high level of support for international redistribution in certain donor countries (Noël and Thérien, 2002) and the low policy salience of ODA allocation in many donor countries (Lundsgaarde, 2016).
Thirdly, even though donor countries have repeatedly endorsed the international target of 0.7% for the ODA/GNI ratio, this commitment lacks stringent enforcement mechanisms, with no sanctions or penalties attached for non-compliance. The target of 0.7% of GNI for ODA is a kind of soft international norm. Fourthly, in relation to the previous point, some donor countries with similar income levels have exhibited substantial variations in their ODA/GNI ratios over the years. For instance, in 2016, Finland, Germany, and New Zealand had remarkably similar GDP per capita figures, standing at \$43,493, \$42,443, and \$40,026, respectively. However, their ODA/GNI ratios significantly diverged, with Finland at 0.44, Germany at 0.70, and New Zealand at 0.25. This underscores the influence of domestic factors in shaping the ODA policies of countries facing similar international pressures. As Gourevitch (1978) argues in his ‘reversed 2nd image’ theory, similar international pressures can yield different foreign policy behaviors due to disparities in domestic factors.
This study aims to elucidate the differences in ODA practices among donor countries, specifically focusing on why some donor countries have maintained a higher ODA/GNI ratio over an extended time frame. Additionally, this study seeks to investigate whether neighboring donor countries have converged in their ODA policies.
While most existing literature on differences in ODA-giving behavior among donor countries concentrates on the purpose of ODA and the internal characteristics of recipient countries (Alesina and Dollar, 2000; Lundsgaarde, 2012; Gulrajani, 2017), there is a notable lack of research regarding variations in the ODA/GNI ratio among donor countries. Although some research attempts have been made to offer explanations for these variations through the creation of ‘general models,’ their primary focus has typically been on economic variables, such as economic size and current account balance, while overlooking other non-economic factors. In an effort to bridge this research gap, this study endeavors to present a comprehensive ‘general model’ of donor countries' ODA-giving behavior.
This study employs a three-level analytical framework for foreign policy making in the field of international relations to elucidate differences in ODA giving behavior. It explores these differences through the lens of individual-level factors, state-level factors, and international-level factors. We anticipate that ordinary individual behavior, internal state characteristics, and international pressures/competition will be correlated with the ODA giving behavior of donor countries. To investigate these relationships, this study utilizes a cross-national time-series regression model to identify causal links between the ODA/GNI ratio and the three explanatory variables. Preliminary empirical results suggest that all three sets of factors—individual-level, state-level, and international-level—are indeed associated with the ODA/GNI ratio. This research endeavor aims to enhance our comprehension of the ODA giving behaviors exhibited by donor countries.
In 1959, Kenneth Waltz presented his seminal work “Man, the State, and War: A Theoretical Analysis,” in which he introduced three explanatory frameworks for the causes of war. Addressing the paramount question in international politics-namely, “What are the sources and causes of war?”-, Waltz asserted that all three levels of analysis can individually and collectively shed light on the causes of war. The first image explanation, rooted in the ideas and theories of Thomas Hobbes, Baruch Spinoza, and Hans J. Morgenthau, characterized domestic and international violence as inevitable outcomes of inherent human malevolence. Waltz succinctly summarized the first image explanation of war by asserting that “the evilness of men, or their improper behavior, leads to war; individual goodness, if universalized, would signify peace.” Waltz’s first image explanation, in short, focuses on individual nature and behavior in explaining the foreign policy behavior of a country.
Waltz's second image explanation delves into the internal structure and characteristics of states. Drawing from the arguments and theories of Immanuel Kant, Woodrow Wilson, and Vladimir Lenin, the second image explanation posits that political and economic organizations, such as democracy/autocracy and capitalist/communist systems, are closely related to the occurrence of war. Waltz’s second image explanation, in short, focuses on internal character and institutions in explaining the foreign policy behavior of a country. Waltz's third image explanation centers on the fundamental nature of international anarchy. Building on the arguments and theories of Thucydides and Jean-Jacques Rousseau, Waltz contends that all countries existing within an anarchic international system, devoid of effective supranational mechanisms for regulating conflicts of interest, inevitably face the prospect of war due to the absence of automatic harmony. Waltz’s third explanation, in short, focuses on the international ordering principle and fundamental relations between countries in explaining the foreign policy behavior of a country.
While Waltz later emphasized the relevance of the third image explanation over the first and second image explanations in his later work (Waltz, 1979), in his original theoretical framework, he highlighted the significance of all three explanations and the need to integrate them. He stated:
‘All three images are a part of nature. So fundamental are man, the state, and the state system in any attempt to understand international relations that seldom does an analyst, however wedded to one image, entirely overlook the other two’ (Waltz, 1979, 160).
The third image describes the framework of world politics, but without the first and second images, there can be no knowledge of the forces that determine policy; the first and second images describe the forces in world politics, but without the third image, it is impossible to assess their importance or predict their results(Waltz, 1979, 238).
The primary focus of Waltz's type of explanations, centered around war, differs significantly from the central focus of this study, which is ODA. Nevertheless, both are integral components of foreign policy. Despite this substantial difference, this study seeks to elucidate the causes of ODA and behavioral disparities among donor countries by applying Waltz's model of the three images of explanations. This study posits that Waltz's model can be generalized to explain various facets of a country's foreign policy, whether it is security, politics, economics, or social issues, including ODA issues. This is because his three-level analytical framework primarily serves as a research methodology rather than offering substantive arguments about the content of foreign policy. It's important to note that this application does not imply that the core tenets regarding human nature, state structure, and international anarchy in Waltz's model can comprehensively explain all variations and causes in foreign policy. Rather, it signifies that the framework of employing three different levels of analysis to understand foreign policy making can be relevantly applied to the context of ODA.
The first image explanation concerning ODA giving focuses on individual-level factors, positing that various personal characteristics and preferences influence the ODA allocation behavior of donor countries. These individual-level factors encompass political preferences, support for aid, individual income levels, exposure to media coverage of humanitarian crises, gender, and other personal traits. For instance, Chong and Gradstein (2008) and Kaufman et al. (2019) contend that individual income levels correlate with preferences for and support of ODA. Furthermore, Paxton and Knack (2011) utilized survey data from donor countries to argue that individual attitudes toward aid are shaped by personal beliefs and characteristics, including religiosity, perspectives on the causes of poverty, awareness of international affairs, and levels of trust in individuals and institutions.
Individual-level behavior related to donating money or supporting greater ODA does not exclusively stem from altruism. Various motivations underpin such behavior, including feelings of shame and guilt, the pursuit of personal happiness, social pressure from peers, and more. However, Baston (2019) posits and empirically investigates that people primarily engage in helping others due to empathy toward fellow individuals.
In this study, I will utilize data on the behavior of ‘giving money’ across different countries as a variable within the first image explanation and at the individual level of analysis. ‘Giving money’ represents altruistic human behavior, whether its ultimate aim is assisting others or enhancing the giver's own well-being (Singer and Ricard, 2015). With the assumption of a relatively stable human nature, Waltz grappled with explaining historical and regional variations in the occurrence of wars.
In the context of this study, differences in ‘giving money’ behavior among countries are construed as reflecting the habits and inclinations of ordinary citizens. It is hypothesized that the giving behavior of a donor country's citizens translates into higher levels of foreign aid contributions, as it implies less resistance to ODA giving from the public. Consequently, donor governments may have greater latitude in shaping their ODA policies, experiencing less domestic pressure. There are several studies which argue that public support for development assistance is an important factor for government ODA spending. For example, Finnemore and Jurkovich(2020) emphasize the importance of public support for foreign policy objectives, including global peace, saving the climate, and eradicating poverty. Finke(2023) also argues that donor governments have to overcome domestic political constraints before they pursue lofty development policy preferences.
The second image explanation in foreign policy making asserts that domestic factors significantly influence the direction and content of a country's foreign policy. This perspective dates back to Schattschneider's work in 1935, which argued that domestic coalition building among interest groups and their political pressure on the government played a pivotal role in shaping American trade policies. Subsequently, numerous arguments and theories have emerged connecting domestic political factors to foreign policy formulation (Waltz, 1959; Katzenstein, 1978; Doyle, 1983; Rogowski, 1989; Milner, 1988; Frieden and Rogowski, 1996).
In the context of international development cooperation, specifically ODA, many scholars have argued that domestic political and social factors, including patterns of political party competition, preferences and political ideologies of policy makers, competition among interest groups, preferences and mobilization of advocacy groups, characteristics of social welfare programs, and social and political values, are intimately intertwined with the foreign aid policies of donor countries (Lumsdaine (1993), Stokke (1989), Imbeau (1989), Thérien and Noël (1994), Noël and Thérien (1995), Goldstein et al. (2000), Thérien and Noël (2000), Thérien (2002), Goldstein and Moss (2005), Tingley (2010), and Lundsgaarde (2016)). For example, Noël and Thérien (1995) contend that domestic social welfare programs exert influence on foreign aid policies, while Stokke (1989) posits that the value systems of welfare states manifest themselves in foreign aid policies at the international level. Mesquita and Smith (2007) argue that a donor country's domestic electorate and winning coalition affect ODA allocation decisions to secure policy concessions from recipient countries. In these research efforts, it is assumed that state-level characteristics are projected onto the international systemic level, ultimately influencing the specific types and directions of foreign policies pursued by countries.1 Building upon these literatures, this study also tries to investigate the causal relationship between domestic welfare spending and ODA giving behavior of donor countries.
It is commonly assumed that donor countries do not engage in competitive efforts to increase their ODA allocations. The affordability and accountability of ODA disbursement are influenced by a variety of factors, including available ODA resources, domestic demand for government spending, political backing for foreign aid, and various other domestic considerations. While there have been persistent recommendations and targets to encourage donor countries to allocate more than the suggested 0.7% ODA/Gross National Income (GNI) ratio, these international institutions and norms remain non-binding.
However, it is important to note that historical instances exist where donor countries did indeed engage in competition to expand their ODA contributions. One notable example is the rivalry between the United States and the Soviet Union during the Cold War era, as both superpowers vied for political and diplomatic support from recipient countries through ODA programs. Another case involved competition between Japan and China, as both nations sought to secure greater access to natural resources held by African recipient countries.
Donor countries may engage in competition for the sake of enhancing their reputation, prestige, and national brand on the global stage, as suggested by Anand (2004, 218). It is a rational choice for donor countries to vie for increased ODA contributions if they anticipate that a favorable reputation, enhanced prestige, and a strong national brand will eventually yield economic and political benefits. These benefits could manifest as increased exports and foreign investments, diplomatic advantages within international organizations, and a heightened sense of national pride among their citizens. While these non-material national interests differ from historically significant security and economic interests, there has been a ‘growing desire for consistency between alleviating poverty overseas and achieving domestic imperatives related to security, political influence, and economic progress’ (Gulrajani, 2017, 377). Also, donor countries give ODA for global public goods as well as for the development of partner countries and donor self interests(Baydag and Klingebiel 2023). Donor countries are thus assumed to compete for ODA allocation with an eye on securing their long-term national interests.
Efforts have been made to develop general models explaining the ODA giving behavior of donor countries, with a focus on their economic capacity and political constraints. The initial attempt by Beenstock (1980) identified factors affecting the variation in ODA allocation among donor countries, highlighting the impact of aid affordability variables such as unemployment rates, balance of payments, government budgets, and economic growth rates. Similarly, Shishido and Minato (1994) found that GDP, balance of payments, exchange rates, defense expenditures, and social security expenditures of donor countries influenced their ODA behavior. Subsequent studies, such as that of Fan and Yuehua (2008), argued that the ODA/Gross National Income (GNI) ratio of donor countries was closely linked to economic development levels, economic standing, tax revenue, welfare expenditures, fiscal balances, trade, foreign investments, and colonial power status. Furthermore, Berthélemy (2006) sought to establish a general model for understanding the heterogeneity in donor behavior, conducting empirical tests to discern altruistic versus egoistic motivations underpinning aid allocation. It is worth noting that all of these research endeavors predominantly emphasized domestic factors in explaining the variation across donor countries, omitting individual and international factors from their analyses. As mentioned, this study tries to apply all three levels of variables in explaining different ODA giving behaviors of donor countries, and thus in making one general model of ODA policies.
This study employs data from the OECD and the World Bank, covering the period from the beginning of 2009 to the end of 2017, for the majority of the variables utilized.2 The dataset encompasses 28 member countries of the OECD DAC. Hungary, a relatively recent addition to the DAC in 2016, is excluded from the analysis due to its recent membership.
The primary independent variable, ‘Donating money,’ is sourced from the Charities Aid Foundation (CAF) World Giving Index. This index examines charitable behaviors worldwide and provides insights into the nature of giving and trends in global generosity.3 The CAF World Giving Index comprises three dimensions of giving behavior: ‘helping a stranger,’ ‘donating money,’ and ‘volunteering time.’ For this study, only the ‘donating money’ score for donor countries is used. It measures the percentage of population who donated money during the year before the Gallup survey(CAF 2019).4 “Donating money” is more directly related to donating ODA to foreign countries.
To address potential autocorrelation concerns, we utilize one-year lagged data for all independent and control variables. This approach not only mitigates autocorrelation issues but also assists in addressing potential endogeneity problems between the dependent and independent variables.
In this paper, we employ the ODA/Gross National Income (GNI) ratio as the dependent variable in our empirical analysis to quantitatively evaluate the effects of variables at three levels of analysis.
This ratio represents the proportion of a donor country's ODA relative to its income.5 Despite continuous recommendations and targets set by the OECD DAC for ODA to reach 0.7% of GNI, the ratio exhibits significant variation among donor countries, ranging from a minimum value of 0.084 to a maximum value of 1.405, as displayed in the table above.6
Our study incorporates three primary independent variables, each estimating the quantitative effects of individual, state, and international (specifically, regional) systemic behaviors. To assess the influence of ordinary individuals' behavior and its connection to government ODA allocation, we utilize the ‘donating money’ percentage for each DAC member country. The range of this percentage is 0 to 1, representing 0% to 100% of the population. For evaluating the impact of domestic social welfare provision by governments in relation to their ODA allocation behavior, we employ the domestic welfare expenditure/GDP ratio. Finally, to gauge the effects of international systemic pressure and competition, we consider the average ODA/GNI ratio of neighboring DAC member countries within the same region.7
Based on our discussion of the main independent variables, we formulate the following three hypotheses:
H1: A higher ‘donating money’ score among OECD DAC members is positively associated with a higher ODA/GNI ratio.
H2: A higher social expenditure over GDP ratio among OECD DAC members is positively associated with a higher ODA/GNI ratio.
H3: A higher average ODA/GNI ratio among neighboring OECD DAC members is positively associated with a higher ODA/GNI ratio.
In addition to the three main independent variables, this study incorporates control variables that may contribute to variations in the dependent variable. The included control variables encompass GDP size, GDP per capita, current account balance as a percentage of GDP, and duration of DAC membership.8
Both GDP size and GDP per capita serve as proxies for the donor countries' capacity for ODA disbursement. The current account balance as a percentage of GDP indirectly gauges the opportunities or constraints faced by donor governments in providing ODA. The control variable regarding the length of DAC membership is included in our empirical analysis to explore whether longer-standing DAC members allocate a higher percentage of their income than newer members, and whether DAC membership influences donor countries to conform to suggested ODA targets.
It is anticipated that all four control variables will exhibit a positive relationship with the ODA/GNI ratio. Economically larger and wealthier donor countries are expected to allocate a higher proportion of ODA to GNI. Donor countries with a more favorable current account balance are also expected to allocate a higher percentage of ODA to GNI. Older DAC member countries are likewise expected to exhibit a higher ODA/GNI ratio.
This study also incorporates two dummy variables to account for fixed effects related to regions and years. The typical approach for addressing fixed effects in panel data analysis involves the inclusion of dummy variables for country effects (rather than regions) and year effects. However, in this study, we utilize region dummies instead of country dummies. This choice is made because the number of countries included in our empirical analysis is relatively large compared to the total number of cases, primarily due to the relatively short time periods under consideration. Additionally, this study assumes that donor countries within the same region share similarities in many aspects, which aligns with our argument regarding the third image explanation.
As previously mentioned, donor countries are categorized into seven distinct regions, and year-specific dummy variables are created for each year of ODA allocation. Nevertheless, it's worth noting that in some empirical analyses, region dummy variables are excluded. This decision is based on the fact that the third independent variable, ‘competition,’ inherently accounts for regional variations by utilizing the average value of the ODA/GNI ratio among neighboring countries within the same region.9
To examine the quantitative impact of the three primary independent variables, this study estimates regression models as follows:
Yit (ODA/GNI) = ait + ∑ßkBk + eit
Where, B1 = donating money percentage
B2 = social expenditure / GDP
B3 = competition (average of ODA/GNI of donor countries in the same region)
B4 = ln(GDP)
B5 = ln(GDP per capita)
B6 = current account balance / GDP
B7 = length of OECD DAC membership
B8 = region dummy
B9 = year dummy
In the above equation, ‘i’ and ‘t’ represent observations on units (countries) and time points (ODA allocation years), respectively. ‘ßk’ denotes a vector of coefficients, while ‘e’ represents the error term. The outcomes of the OLS regression analyses are presented in Table 2.
The results of the three models estimating the ODA/GNI ratio of donor countries are presented in Table 2. This study conducted three multiple regressions to investigate whether individual behavior, state characteristics, and regional competition influence the ODA/GNI ratio of donor countries. In terms of the direction and statistical significance of beta coefficients, the three models yield very similar results, except for the control variable of ln(GDP).
The outcomes of these multiple regression analyses confirm the three hypotheses posited in this study. All three independent variables exhibit positive and statistically significant relationships with the dependent variable, the ODA/GNI ratio. The individual behavior of donating money in donor countries is positively associated with the ODA/GNI ratio, suggesting that a higher prevalence and positive attitude toward donating money leads to a higher ODA/GNI ratio. This implies that donating money behavior extends into the international realm of foreign aid and collectively influences the government's ODA policies in donor countries.
As expected, a higher ratio of social expenditure over GDP is positively correlated with a higher ODA/GNI ratio. This result indicates that domestic social and economic ideologies centered on citizen social protection in donor countries translate into the international sphere, influencing government spending on ODA.
Lastly, competition and peer pressure from neighboring countries also exhibit positive relationships with the ODA/GNI ratio. This suggests that a higher ODA/GNI ratio among neighboring donor countries prompts donor countries to allocate a higher proportion of their GNI to ODA in the subsequent year. This implies that even though donor countries may not actively compete for increased ODA spending, they are concerned about the ODA expenditures of their neighboring countries and are wary of potential damage to their reputation and national brand resulting from lower ODA spending. This pattern of competition or convergence among neighboring countries is effectively illustrated in the subsequent figures.
All the aforementioned figures illustrate that the ODA/GNI ratios among neighboring donor countries have exhibited a degree of convergence.
Furthermore, all three control variables have shown a positive and statistically significant relationship with the ODA/GNI ratio. Wealthier donor countries allocate a higher proportion of their income to ODA. Donor countries with a more favorable current account balance also allocate a higher proportion of their income to ODA. Additionally, older OECD DAC member countries allocate a higher proportion of their income to ODA. However, the independent variable representing the GDP size of donor countries displays an unstable relationship with the dependent variable. In two models, it exhibits a positive and statistically significant relationship with the ODA/GNI ratio, whereas in another model, it displays a negative and statistically significant relationship with the ODA/GNI ratio.
This study confirms that individual-level, state-level, and international systemic-level variables significantly influence the ODA policies of donor countries. Moreover, it underscores that the capacity, affordability, and experiences of donor countries have a substantial impact on their ODA policies.
However, it is worth noting that these three levels of analysis factors may be intricately interconnected. Neighboring countries often share historical experiences that lead their populations to adopt similar attitudes toward helping others and donating money. This can also result in similarities in their domestic social organizations. While this interconnectedness might hold some truth, this study has made efforts to disentangle their effects from one another by controlling for other essential variables, including economic size, wealth, affordability, and the duration of OECD DAC membership.
Various individual-level characteristics and circumstances influence people's decisions regarding charitable donations and support for ODA allocations by their governments. Domestic factors are equally diverse and encompass aspects such as history, culture, shifts in social values, political ideologies, economic conditions, party coalitions, and government-level characteristics, all of which contribute to the ODA giving behavior of donor countries. In comparison, international factors exert relatively less influence since donor countries face similar constraints imposed by international institutions and norms.
Based on discussions and empirical findings presented in this study, there are at least two significant theoretical and empirical contributions to the academic field of international development cooperation. The first contribution lies in the application of a widely recognized general foreign policy model to the study of ODA. Given that ODA serves as a crucial foreign policy tool to advance national interests, the endeavor to elucidate variations in ODA policies among major donor countries through the application of this prominent foreign policy model enriches our comprehension of foreign policy making pertinent to ODA. The second contribution aligns with Waltz’s assertion regarding the relative advantage of the third image explanation in foreign policy development. This study underscores aspects of peer pressure and competition that drive the promotion of national images and brands through the provision of ODA. Also, this study is the first attempt to include peer pressure at the regional level.
It is challenging to answer why only certain factors were selected out of numerous potential variables. The selection criteria for explanatory variables in this study were not definitive, as the primary aim was to apply Waltz's three-level analysis framework and develop a single, overarching model that could be applicable to all OECD DAC member countries. Additionally, the choice of variables for empirical analysis was somewhat constrained by data availability.
Additionally, a methodological limitation needs to be acknowledged. This study employed a one-level regression model, with all variables measured at the national level. Due to the availability of data for the independent variables at the national level only, the study opted for a one-level regression model instead of utilizing multi-level regression models that could incorporate variables measured at different levels.
Nevertheless, the selected variables in this study are believed to capture key aspects of individual-level, state-level, and international-level factors influencing ODA giving practices. It is anticipated that future research endeavors will be able to expand upon this study by incorporating additional explanatory variables, thereby enhancing the empirical models based on the framework presented in this study.
1 The notion of “externalization” is similar to the democratic peace hypothesis which states that structural and institutional characteristics in democracies are reflected in the peaceful resolution of conflict among democratic countries(Schweller 1992).
2 The Empirical analysis of this study cover the years between 2009 and 2017. The starting year of 2009 is the first year when the data for “donating money” is available.
3 www.cafonline.org. Charities Aid Foundation
4 It can be argued that usage of survey data might result in distorted outcomes of empirical analyses. However, CAF’s cross national and time series data on donating money is the only one of this type.
5 The ODA/GNI ratio is calculated according to definitions and classifications set out by the OECD Development Assistance Committee, and then it can be used as a standard measurement for comparison of aid spending between countries.
6 The 0.7% ODA/GNI target was first agreed upon in 1970 and has been repeatedly re-endorsed at the highest level at international aid and development conferences. In 1969, the Pearson Commission – in its report Partners in Development – proposed a target of 0.7% of donor GNP to be reached “by 1975 and in no case later than 1980.” This suggestion was adopted in a UN resolution on 24 October 1970. The target built on the DAC’s 1969 definition of ODA(The 0.7% ODA/GNI target - a history - OECD)
7 For the regional categorization, this study categorizes donor countries into 7 different regions including Northern Europe, Western Europe, Eastern Europe, Southern Europe, East Asia, North America and Oceania.
8 Multicollinearity was assessed among the independent and control variables, and the analysis revealed that there is no significant multicollinearity issue that would distort the results of the regression analysis. Specifically, the Pearson correlation coefficient between the natural logarithm of GDP and the natural logarithm of GDP per capita was found to be -0.056.
9 When there are only two countries in the region (East Asia, North America and Oceania), this study uses the ODA/GNI ratio of the previous year for the “competing” neighboring country.
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