Factors of Czech Aid Selection and Allocation: Panel Probit and Tobit Analysis

Abstract

The aim of our paper is to identify factors that influence the territorial selection and allocation of development aid of the Czech Republic. We applied random-effects probit and tobit models in our regression analysis which revealed that flows of Czech aid to individual developing countries are determined by variety of factors. Czech interests and mutual relations were mostly identified as statistically significant determinants, namely export volumes, closer historical relations and geographical proximity. The presence of Czech embassy in a country was not confirmed as a significant factor. The reflection of recipients' needs in Czech aid selection and allocation is rather ambiguous. While Czech aid flows depend positively on total population and negatively on per capita income of recipient countries, they are positively influenced by the recipients' level of social development. Similarly, the Czech Republic tends to give (more) aid to more democratic and freer countries with lower institutional quality.