Structural economic vulnerability, openness and bilateral development aid flows

This study investigates the relationship between countries' structural economic vulnerability (EVI) and the bilateral aid received from donors, including in the context of higher degree of trade openness and/or financial openness. The empirical analysis suggests that donors' bilateral aid supply to Least developed countries (LDCs) increases when the latter experience higher EVI. A rise in EVI in non-Least developed countries (non-LDCs) does not lead to higher donors' aid supply. Furthermore, the analysis indicates that the impact of EVI on bilateral aid inflows could be dependent upon the degree of trade openness or financial openness but not on both together.