The effect of asylum-seeker inflows on European donors' bilateral aid allocation

Abstract

This paper investigated the effect of asylum-seeker movement on bilateral aid

allocation focusing on European donors over the period of 2009-2015 in which

Europe has been suffering from an unwanted foreign intrusion. The underlying

assumption on the relationship between asylum-seeker movement and bilateral aid

allocation is that a donors security interest attached to bilateral aid allocation gains

more significance by using bilateral aid as a policy measure to address a growing

security threat entailed by the migratory movement of asylum-seekers. This is

because the migratory movement of asylum-seekers is largely believed to be caused

by a malaise of development and fragility of the global South which is normally

tackled by a provision of foreign aid. By doing so, a relative significance and/or

presence of a donors security interest among other purposes of bilateral aid (i.e.

recipients needs, aid effectiveness etc.) is expected to be revealed.

A fixed-effects model was applied to a panel of 21 OECD DAC EU donors

and 137 OECD DAC recipients over the period of 2009-2015. The empirical analysis

suggests that the influx of asylum-seekers from recipient countries is associated with

an increase in overall volume of bilateral aid committed by European donors to the

respective recipient countries, particularly in those with close geographical

proximity to the asylum-seeker movement or high immigration rate. Furthermore,

such an increase in bilateral aid allocated to asylum-seeker sending countries is

focused on the sectors that are assumed to be able to tackle the root causes of

irregular migration by providing a firm ground for sustainable development and

stability.