Donor fragmentation and bureaucratic quality in aid recipients

Abstract

We analyze the impact of donor fragmentation on the quality of government bureaucracy in aid-recipient nations. A formal model of a donor's decision to hire government administrators to manage donor-funded projects predicts that the number of administrators hired declines as the donor's share of other projects in the country increases, and as the donor's concern for the success of other donors' projects increases. The model's predictions are consistent with results from cross-country empirical tests, using an index of bureaucratic quality available for aid-recipient nations over the 1982-2001 period.

Government ideology in donor and recipient countries: Does ideological proximity matter for the effectiveness of aid?

“…4 Aid divided into many packets involves considerable transaction costs related to intensive negotiation and distinct management and reporting requirements (Acharya et al 2006: 6). It also adds to poaching, i.e., donors absorbing talented local staff to improve their own project-related management and control -even though this often crowds out more productive local development activities (Knack and Rahman 2007). In contrast to project-specific aid, general budget support is widely believed to reduce transaction costs.…”

International Development Aid: A Complex System

“…There are too many in total and too many in each country, with overlapping mandates, complex funding arrangements and conflicting requirements for accounting and reporting.' In addition, duplication, overlap and fragmentation are creating substantial transaction costs for donors and recipient governments (Burall and Maxwell, 2006;Roodman, 2006;Knack and Rahman, 2007;Mavrotas and Reisen, 2007).…”

The politics of energy and development: Aid diversification in the Philippines

“…The general effects of development aid diversification, proliferation [1,35] or fragmentation [6,37,39] are widely discussed especially in the light of aid effectiveness [42] and the Paris reform agenda [51]. Research concentrates on cross-country or crosssector analyses, that either discusses how to measure diversified aid [38] or outlines its general effects on the recipient countries' bureaucratic quality [37], economic growth [35] or financial costs [6].…”