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  • 1 https://isni.org/isni/0000000404811396, International Monetary Fund

Appendix A. Data Description and Sources

1) NGO AID

Source: European Commission, budget line B7-6000.

The data represent commitments of European Commission to cofinancing NGO projects in a given country in a given year.

2) Bilateral Aid

Source: OECD

Total official development assistance committed to a country in a given year by the countries that are part of the Development Assistance Committee.

3) Infant mortality rate

Source: World Development Indicators

The number of infants who die before reaching one year of age, per 1,000 live births in a given year.

4) Total adult illiteracy rate

Source: World Development Indicators

The proportion of adults aged 15 and above who cannot, with understanding, read and write a short, simple statement on their everyday life.

5) Female adult illiteracy rate

Source: World Development Indicators

The proportion of female adults aged 15 and above who cannot, with understanding, read and write a short, simple statement on their everyday life

6) Public education expenditure

Sources: World Development Indicators for education data and IMF staff estimates for total expenditures. See Appendix B contains for on the level of government that is relevant for each country.

7) Public health expenditure

Source: IMF staff estimates. See Appendix B for the relevant level of government for each country.

8) Health expenditure per capita

Source: World Development Indicators and staff estimates

9) Education expenditure per capita

Source: World Development Indicators and staff estimates

10) Agriculture value added per worker (constant U.S. 1995 dollars)

Source World Development Indicators

Agriculture value added per worker is a measure of agricultural productivity. Value added in agriculture measures the output of the agricultural sector (ISIC divisions 1-5) less the value of intermediate inputs. Agriculture comprises value added from forestry, hunting, and fishing as well as cultivation of crops and livestock production. Data are in constant 1995 U.S. dollars.

11) GDP per capita

Source: World Development Indicators.

The data are in constant 1995 U.S. dollars.

12) ICRG

Source: International Country Risk Guide/Political Risk Services (IBC USA Publications, Inc.). Composite index based on political financial and economic risk ratings compiled by ICRG. Political risk accounts for 50 percent of the composite rating while financial and economic risk ratings account for 25 percent each. The highest overall rating (theoretically 100) indicates the lowest risk, and the lowest rating (theoretically 0) indicates the highest risk.

13) IMF

Source: IMF

Dummy that assumes value 1 if there is a structural adjustment program supported by the IMF in a country in a given year and 0 if there is no program.

14) Urbanization

Source: World Development Indicators

Urban population as a percentage of total population.

15) Population growth rate

Source: World Development Indicators

16) Military expenditure

Source: World Development Indicators

Military expenditure as a percentage of central government expenditures.

17) National poverty

Source: World Development Indicators

Percentage of the population living below the national poverty line. National estimates are based on population-weighted sub-group estimates from household surveys.

Appendix B. Level of Government Relevant for Public Expenditure Data

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Appendix C. Countries

Countries in sample for stylized facts on infant mortality

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Countries in base sample for infant mortality regressions

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Countries in the base sample for regressions on adult illiteracy and stylized facts

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Countries in the base sample used for regressions on government effort in health

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Countries in the base sample used for regressions on government effort in education

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Appendix D. Millennium Development Goals

Goal 1: Eradicate extreme poverty and hunger

Target 1: Halve, between 1990 and 2015, the proportion of people whose income is less than $1 a day

Target 2: Halve, between 1990 and 2015, the proportion of people who suffer from hunger

Goal 2: Achieve universal primary education

Target 3: Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling

Goal 3: Promote gender equality and empower women

Target 4: Eliminate gender disparity in primary and secondary education preferably by 2005 and in all levels of education no later than 2015

Goal 4: Reduce child mortality

Target 5: Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate

Goal 5: Improve maternal health

Target 6: Reduce by three-quarters, between 1990 and 2015, the maternal mortality ratio

Goal 6: Combat HIV/AIDS, malaria, and other diseases

Target 7: Have halted by 2015 and begun to reverse the spread of HIV/AIDS

Target 8: Have halted by 2015 and begun to reverse the incidence of malaria and other major diseases

Goal 7: Ensure environmental sustainability

Target 9: Integrate the principles of sustainable development into country policies and program and reverse the loss of environmental resources

Target 10: Halve, by 2015, the proportion of people without sustainable access to safe drinking water and basic sanitation

Target 11: Have achieved, by 2020, a significant improvement in the lives of at least 100 million slum dwellers

Goal 8: Develop a global partnership for development

Target 12: Develop further an open, rule-based, predictable, nondiscriminatory trading and financial system (includes a commitment to good governance, development, and poverty reduction—both nationally and internationally)

Target 13: Address the special needs of the least developed countries (includes tariff-and quota-free access for exports enhanced program of debt relief for HIPC and cancellation of official bilateral debt, and more generous ODA for countries committed to poverty reduction)

Target 14: Address the special needs of landlocked countries and small island developing states (through the Program of Action for the Sustainable Development of Small Island Developing States and 22nd General Assembly provisions)

Target 15: Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term

Target 16: In cooperation with developing countries, develop and implement strategies for decent and productive work for youth

Target 17: In cooperation with pharmaceutical companies, provide access to affordable, essential drugs in developing countries

Target 18: In cooperation with the private sector, make available the benefits of new technologies, especially information and communication

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1

Nadia Masud was a summer intern in the IMF Institute when this paper was being prepared; she is a PhD candidate at the University of Oxford, United Kingdom. Boriana Yontcheva is an economist at the IMF Institute. We gratefully acknowledge the assistance of France Marion, Lisbeth Ekelof and César-Luis Valor-Arce, European Commission who provided key data for this research. We are indebted to B. Baltagi for guidance and discussions on the econometrics of this paper. J. Salvati provided invaluable technical assistance. A. Berg, T. Cordella, A. Feltenstein, and participants at an IMF Institute seminar provided many useful suggestions. Errors are solely ours.

3

For a review of progress on the International Development Goals, see www.paris21.org/betterworld.

4

Refer to Appendix A for a definition of these variables.

5

Appendix C lists the countries included in this sample.

6

Refer to Appendix C for a list of these countries.

8

For a more detailed exposition of the relationship between the EU and NGOs, see Cox and Koning (1997).

9

The Davidson and MacKinnon test showed that regressors were all strictly exogenous.

10

Refer to Appendix C for the sample.

11

NGO aid is defined as projects implemented by foreign NGOs and, hence, is a resource for the recipient country that is outside the budget.

12

Refer to Appendix C for the sample.

13

We used the Davidson MacKinnon test for exogeneity.

17

Refer to Appendix C for the sample.

18

Refer to Appendix C for the sample.

19

As shown by Clemens, Radelet, and Bhavnani, (2004), decomposing bilateral aid into different structural categories cam yield very different results in terms of its effectiveness.

Does Foreign Aid Reduce Poverty? Empirical Evidence from Nongovernmental and Bilateral Aid
Author: Boriana Yontcheva and Mrs. Nadia Masud