Food Aid Allocation Policies: Donor Coordination and Responsiveness to the Needs of Recipient Countries

This study employs a multivariate Tobit model to investigate whether food aid flows of the main donor countries – USA, EU (Community Aid and Member States), Canada, Japan and Australia – respond to recipient countries’ needs and the extent to which the donors interact in their food aid allocation. The response of global food aid is also analyzed with a censored least absolute deviation (CLAD) model to highlight the overall performance of aggregate food aid. The empirical results generally indicate that both global and bilateral food aid are effective instruments in improving food security at the national level in recipient countries. In particular, global food aid is found to be significantly targeted to poorer countries, as well as countries facing temporary food crises, sudden natural disasters and conflicts. All major donor countries are found to direct their food aid shipments to poorer countries and appear to significantly coordinate their food aid shipments, so that food aid from other donors are generally treated as complements. While highly significant persistence is found in each donor’s and global food aid allocation, variables representing donor interests were generally insignificant at conventional levels.