The Park Place Economist


The United States is one of the largest donors of Official Development Aid in the world. Despite its economic nature, political factors have historically played a large part in determining who gets what amount of aid. As a rational actor, the United States is looking to get benefits from their ‘investments.’ Because of this, this paper is interested in determining whether corruption in recipient countries determines US ODA patterns. In addition, this paper will attempt to determine whether political variables are the main determinants of US aid disbursement policy over time. As found by the use of a random effects estimation using panel data, corruption in recipient countries results in receiving less ODA from the United States. In addition, political factors have a large impact on aid disbursement patterns from the US.