Trends in Foreign Aid Allocation to Ukraine: A Two-Stage Analysis of Political, Economic, and Geographical Determinants between 2005-2021

While determinants of aid allocation to Ukraine have recently been studied in the context of Russia’s invasion, little is known about relevant factors prior to the full-scale invasion in 2022. This paper investigates political, economic, and geographical factors that influenced aid allocation to Ukraine between 2005 to 2021, contributing to a more comprehensive understanding of aid allocation dynamics. A two-stage model is used, separating between the initial decision to become a donor and the amount allocated. The results indicate that countries with larger populations, higher per capita income, and greater political freedoms are more likely to become aid donors to Ukraine, as well as to commit larger amounts. Aid allocation decisions across both stages are further closely associated with the level of political stability in Ukraine, indicating that countries are more likely to become donors and provide higher amounts of aid when stability decreases, possibly to mitigate spillover effects, enhance regional stability and address heightened needs. Donors thus appear to me mostly motivated by self-interests and recipient need, with little evidence for merit-based considerations.