The Hudson Institute recently published figures for the 2011 Index of Global Philanthropy and Remittances,
which AidData has posted on its Research
Datasets page. The Hudson Institute's
dataset contains figures for total official and estimated private flows from
1991-2009, including remittances, private investment, and philanthropy. It also
provides bilateral remittance data for 2010.
Here we briefly review the data to track overall trends in global
development finance over the last twenty years.
The results are provided below:
The data for private flows, which include private
investment, private philanthropy, and remittances, are derived from the Hudson
Institute’s report, while the data for bilateral and multilateral flows are
derived from an AidData.org export. The most striking overall trend is the increasing
role of private flows in global development finance. Private flows have exceeded traditional aid flows
for the past 8 years. In 2009, remittance
flows exceeded DAC
bilateral aid flows by nearly $60 billion.
Whether this is attributable to an actual funding increase or an
improvement in remittance data collection, it highlights the importance of
these flows. Much of the existing
aid literature focuses on "official transfers" from bilateral and
multilateral aid agencies. This graph calls attention to the need for more
research on the motivations and effects of private sources of global
development finance.
At the same time, one must interpret the graph above with caution.
Non-DAC bilateral and multilateral flows appear to represent a tiny fraction of
overall global development finance. However, many of the largest sources of
non-DAC development finance -- China, Venezuela, Russia, Iran, Saudi Arabia --
do not participate in the existing global aid reporting system. China, for
example, may provide anywhere between $1.5 to $25 billion a year in global
development finance, and none of these flows are captured in the graph
above.
Additionally, one must remember that the mix of development
funding sources can vary significantly across recipient countries. Consider
Mauritania. In 2007, Mauritania received approximately 61% of its (reported)
bilateral and multilateral aid
from non-DAC donors. However, these estimates do not capture substantial unreported
transfers
from Libya and Iran. Nor do they include private investment, private
philanthropy, and remittances.
This last point merits special attention. While the Hudson
Institute is currently able to provide overall
global estimates of private investment, private philanthropy, and
remittances, these data are not available at the recipient-country-year level. The
absence of country-level data on private investment, private philanthropy, and
remittances almost certainly distorts the overall picture of global development
finance flowing into a given country. Haiti, for example, received an estimated
$2.1
billion from private charities following the 2010 earthquake. If one
considers that amount in relation to the total net ODA received
in 2010 ($3.07 billion), the need for a
more comprehensive development finance reporting system comes into sharper
resolution. Nepal provides another interesting example. It received $3.5
billion in remittances
in 2009, which dwarfs the total amount of ODA
it received in the same year.
This pattern holds for donor countries as well. While private philanthropy represents a
fairly small portion of giving in France (an estimated 8% of the total ODA
budget in 2009), funding from private charities equaled 130% of ODA in the United
States in 2009. Clearly, this is an area
ripe for future research, especially as the data for tracking private and
non-DAC sources of development finance becomes richer and more accurate.
This post was
contributed by William & Mary students Ben Buch ’12 and Kevin McCrory ’12,
both AidData research assistants.
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