ABSTRACT
This chapter provides the methodological ground for the estimations in later chapters. The first major section discusses the econometrics of explaining the pattern of aid giving in the context of panel data. The following section explores what should be the dependent variable in the regressions – a question, which has an answer that is less straightforward than one might think. Then follows a presentation of the explanatory or independent variables used, grouped into RN, DI and GG. The chapter closes with a discussion of some remaining statistical issues and an appendix, which explains how the explanatory variables were constructed and were the data came from.
