Who to Help? Who to Help? Molly MoralesMolly Morales

Grace FentonGrace Fenton

QuestionQuestion

• How do philanthropists decide which How do philanthropists decide which countries to help? countries to help?

• Bill and Melinda Gates Foundation (BMGF) is Bill and Melinda Gates Foundation (BMGF) is the largest private grant-making foundationthe largest private grant-making foundation

• How does the BMGF chose which African How does the BMGF chose which African countries to allocate grants to? countries to allocate grants to?

Literature Literature

• World Bank and IMF avoid democracies (Kanbur, 2000)World Bank and IMF avoid democracies (Kanbur, 2000)

• ““Rather than demonstrating a positive relationship Rather than demonstrating a positive relationship between foreign aid and recipient social-welfare factors, between foreign aid and recipient social-welfare factors, our findings discounted the role of humanitarian need our findings discounted the role of humanitarian need in the aid policies of these industrialized democracies” in the aid policies of these industrialized democracies” (Schraeder et al., 1998) (Schraeder et al., 1998)

Literature Literature

• ““Countries which have democratized have Countries which have democratized have received a ‘surge’ of foreign aid, immediately received a ‘surge’ of foreign aid, immediately afterwards” (Alesina, 1998) afterwards” (Alesina, 1998)

• “ “Grant making by the Gates Foundation seems to Grant making by the Gates Foundation seems to be largely managed through an informal system of be largely managed through an informal system of personal networks and relationships rather than by personal networks and relationships rather than by a more transparent process based on independent a more transparent process based on independent and technical peer review” (McCoy 2009) and technical peer review” (McCoy 2009)

The Foundation The Foundation

• Assets exceeding $37 billion Assets exceeding $37 billion

• In 2011, $3.4 billion was granted In 2011, $3.4 billion was granted

• ““All lives have equal value” All lives have equal value”

• Goal is health care equalityGoal is health care equality

Our Goal Our Goal

• Does regime type have an affect on if the Does regime type have an affect on if the country gets aid? country gets aid?

• We associate equality with democracyWe associate equality with democracy

• Hypothesis: Democracies get more aid than Hypothesis: Democracies get more aid than non democraciesnon democracies

• Test this hypothesis and conduct case studies Test this hypothesis and conduct case studies

The Data The Data

Aid Given to Democratic CountriesAid Given to Democratic Countries• Democracies receive 24% more aid than non Democracies receive 24% more aid than non

democraciesdemocracies

Ln_gates Coef. Std. Err. t P>|t| [95% Interval]

Dem_dum

0.238 0.124 1.91 0.057 [-0.008, 0.484]

Cons 0.232 0.065 3.59 0.000 [0.104, 0.359]

The Data The Data

Controlling for GDP per capita (Constant 2000 Controlling for GDP per capita (Constant 2000 USD)USD)

• When controlling for GDP, the results were not When controlling for GDP, the results were not statistically significant statistically significant

Ln_gates Coef. Std. Err. t P>|t| [95% Interval]

Dem_dum 0.261 0.131 1.99 0.049 [0.001, 0.521]

Gdppercapita

-0.000 0.000 -1.45 0.149 [-0.000, 0.000]

_cons 0.304 0.078 3.88 0.000 [0.149, 0.459]

Analysis Analysis

• ““Philanthrocapitalist”Philanthrocapitalist”

• Investment policies discredit Investment policies discredit •Ebocha, Nigeria Ebocha, Nigeria

• ““The Gates Foundation is not a passive donor. The Gates Foundation is not a passive donor. The foundation actively engages in policy The foundation actively engages in policy making and agenda setting activities” making and agenda setting activities” (McCoy, 2009)(McCoy, 2009)

South AfricaSouth Africa

• 2009- $3.18 Gates Aid (2010 USD Millions)2009- $3.18 Gates Aid (2010 USD Millions)• GDP Per Capita (Constant 2000 USD):GDP Per Capita (Constant 2000 USD):

• 2009- $3,697.672009- $3,697.67• 2010- $3,753.452010- $3,753.45• 2011- $3,825.092011- $3,825.09

• DemocraticDemocratic• TBTB• Bilateral Relations with USBilateral Relations with US• Pivotal StatePivotal State• ““Good Governance”Good Governance”

BurundiBurundi

• No Aid No Aid • Low GDP Per Capita (Constant 2000 USD): Low GDP Per Capita (Constant 2000 USD):

• 2009- $136.662009- $136.66• 2010- $138.252010- $138.25• 2011- $140.812011- $140.81

• AIDS, TBAIDS, TB• Non-democraticNon-democratic• Human Rights ViolationsHuman Rights Violations

Future workFuture work

• Examine the trends in relation to the US’ Examine the trends in relation to the US’ foreign aid policies foreign aid policies

• Relation of the outbreak of diseases in the Relation of the outbreak of diseases in the country country

• Look further into humans’ rights violations Look further into humans’ rights violations

Conclusion Conclusion

Question: Are democracies more likely to Question: Are democracies more likely to receive aid from the Gates Foundation than receive aid from the Gates Foundation than non-democratic countries?non-democratic countries?

Findings: The Gates Foundation donates more Findings: The Gates Foundation donates more to democratic countries than non-democratic to democratic countries than non-democratic ones.ones.

• More tests are needed More tests are needed

Political factors play a significant role Political factors play a significant role