title: Determinants of foreign aid to the Philippines : 1960-1993
Creators: name: Marcelo, Thomas Benjamin B
Publisher: name: The Australian National University
Year: 1999
Subjects: subject: HC455.M37 1999
subject: Economic assistance Philippines

description: The thesis examines the influence of recipient need, donor economic and political interests, incrementalism and the role of the recipient state in the provision of foreign aid to the Philippines. It studies these factors for both bilateral and multilateral aid to the Philippines. Bilateral donors analysed were Australia, Canada , Germany, Italy, Japan, the Netherlands, and the United States. Multilateral donors analysed were the Asian Development Bank, the World Bank, and the United Nations. Together, these donors accounted for 95 per cent of the total US$20.3 billion in foreign aid to the Philippines over the period 1960-1993. Bilateral donors accounted for approximately 67 per cent of total foreign aid flows, with the rest provided by multilateral donors. Foreign aid came mostly in the form of loans, constituting approximately 65 per cent of total foreign aid flows to the Philippines. Through time-series multiple regression analysis, variables reflecting recipient need, donor economic and political interests, and incrementalism associated with the provision of foreign aid were examined using foreign aid data from the OECD Geographical Distribution of Financial Flows to Developing Countries covering the period 1960-1993. The empirical analysis into the determinants of foreign aid to the Philippines is complemented by two case studies involving an historical and contextual analysis of the determinants of foreign aid provided by Japan and the Asian Development Bank. Through a literature survey and documentation analysis, the Philippine aid programming system is examined to determine to wbat extent the Philippine government is able to participate in the foreign aid decision-making process. The thesis found a significant association between recipient need and the provision of foreign aid to the Philippine_s over the period 1960-1993. Bilateral and multilateral donors that provided aid to promote socio-economic development in the Philippines were Australia, Canada , Germany, Italy, Japan , Netherlands, United States , Asian Development Bank, World Bank, and the United Nations . The thesis also found a significant association between incrementalism and the provision of foreign aid . Except for the United States and the Asian Development Bank, the results of the empirical analysis suggests that bilateral and multilateral donors take into account past allocations of aid in determining the amount and form of aid to be provided to the Philippines in the current year. Recipient need and incrementalism both combined to explained between 60 to 95 per cent of the variation in aid flows from individual bilateral donors over the period 1960-1993. Recipient need and/or performance explained approximately 60 per cent of the variation in aid flows from individual multilateral donors over the period 1960-1993. The thesis found that donor economic and political interests did not figure significantly in the provision of foreign aid. Donor economic interests combined with recipient need explained bilateral aid flows from the United States to the Philippines over the period 1960-1993. Donor political interests was significant only for bilateral aid of the United States in 1960-1977, along with recipient need and donor economic interests. The case studies of bilateral aid from Japan and multilateral aid from the Asian Development Bank support the findings of the empirical analyses on the significance of recipient need in the provision of foreign aid to the Philippines. However, in the case study of Japan's bilateral aid, donor economic and political interests were found to be important as well in the provision of bilateral aid to the Philippines. The significant association between recipient need and incrementalism and the provision of both bilateral and multilateral aid is an encouraging finding and welcome development. This suggests that foreign aid is being provided genuinely to promote economic and social development in the Philippines. The significant association between incrementalism and the provision of foreign aid provides a glimmer of hope that foreign aid will remain an important and relatively competitive source of development financing. These developments opens a window of opportunity for the recipient state to participate more actively and effectively in the foreign aid decisionmaking process to ensure that foreign aid resources are directed to priority development activities and accelerate further socio-economic development in the Philippines.