Foreign Aid Effectiveness - Public Opinion Approach

Abstract

The empirical literature on aid effectiveness produces mixed and inconclusive results. This may be because it lacks a clear theoretical framework. Inspired by the inconclusive results of aid effectiveness literature, this paper departs from the main stream and seeks to establish a new path of exploring the issue of aid effectiveness. The experiences, perceptions, and beliefs of public opinion leaders in the recipient country regarding aid effectiveness and the actors involved, are the main input for the analysis. The Palestinian economy is taken as a case for this purpose. The main argument of this study is that foreign aid effectiveness as seen by the citizens is determined by three factors: the quality of governance, aid conditionality and donors’ policies, and the Israeli policies. For the purpose of exploring this argument, data from a survey of 275 public opinion leaders were used to test the relationship. A stepwise multiple regression analysis was performed. The findings revealed that the quality of governance is the most important factor influencing the respondents’ perception of aid effectiveness. The most shocking finding was the tendency of respondents to prefer projects implemented by donors rather than the PA.

Keywords: Foreign Aid, Aid Effectiveness, Governance, Donors’ policies, Public opinion.

JEL classification: O19, F35