Modelling the Allocation of Australian Bilateral Aid: A Two-Part Sample Selection Approach.

This paper focuses on the allocation of Australian bilateral aid to developing countries. It simultaneously models the determination of potential recipients' eligibility for Australian aid and the amounts of aid that eligible countries receive. A variant of the econometric technique developed by L. F. Lee and G. S. Maddala (1985) is utilized. The results obtained indicate that the decisions underlying the allocation of Australian bilateral aid generally seem consistent with the humanitarian, commercial, political, and strategic motives underlying the aid program as a whole. Copyright 1991 by The Economic Society of Australia.