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Aid fragmentation and donor transaction costs

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  • Anderson, Edward

Abstract

This paper shows that the fragmentation of bilateral donors’ aid across recipient countries tends to raise their transaction costs. It is estimated that bilateral donors could reduce their transaction costs by US$2.5 billion per year through greater recipient country specialisation.

Suggested Citation

  • Anderson, Edward, 2012. "Aid fragmentation and donor transaction costs," Economics Letters, Elsevier, vol. 117(3), pages 799-802.
    • Handle: RePEc:eee:ecolet:v:117:y:2012:i:3:p:799-802
    DOI: 10.1016/j.econlet.2012.08.034
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    References listed on IDEAS

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    1. Djankov, Simeon & Montalvo, Jose G. & Reynal-Querol, Marta, 2009. "Aid with multiple personalities," Journal of Comparative Economics, Elsevier, vol. 37(2), pages 217-229, June.
    2. Knack, Stephen & Rahman, Aminur, 2007. "Donor fragmentation and bureaucratic quality in aid recipients," Journal of Development Economics, Elsevier, vol. 83(1), pages 176-197, May.
    3. Head, Keith & Mayer, Thierry & Ries, John, 2010. "The erosion of colonial trade linkages after independence," Journal of International Economics, Elsevier, vol. 81(1), pages 1-14, May.
    4. World Bank, 2011. "World Development Indicators 2011," World Bank Publications - Books, The World Bank Group, number 2315, December.
    5. Kimura, Hidemi & Mori, Yuko & Sawada, Yasuyuki, 2012. "Aid Proliferation and Economic Growth: A Cross-Country Analysis," World Development, Elsevier, vol. 40(1), pages 1-10.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Yasemin Bal Gündüz & Masyita Crystallin, 2018. "Do IMF programs catalyze donor assistance to low-income countries?," The Review of International Organizations, Springer, vol. 13(3), pages 359-393, September.
    2. Rune Jansen Hagen, 2018. "Losing concentration? Lessons from a Swedish aid policy reform," Development Policy Review, Overseas Development Institute, vol. 36(S2), pages 984-1003, September.
    3. Öhler, Hannes, 2017. "A micro-level analysis of the effects of aid fragmentation and aid alignment," IDOS Discussion Papers 7/2017, German Institute of Development and Sustainability (IDOS).
    4. Bedassa Tadesse & Elias Shukralla & Bichaka Fayissa, 2017. "Are bilateral and multilateral aid-for-trade complementary?," The World Economy, Wiley Blackwell, vol. 40(10), pages 2125-2152, October.
    5. Fløgstad, Cathrin & Hagen, Rune Jansen, 2017. "Aid Dispersion: Measurement in Principle and Practice," World Development, Elsevier, vol. 97(C), pages 232-250.
    6. Knack, Stephen, 2012. "When do donors trust recipient country systems ?," Policy Research Working Paper Series 6019, The World Bank.
    7. Francesca G. Caselli & Andrea F. Presbitero, 2020. "Aid Effectiveness in Fragile States," Mo.Fi.R. Working Papers 158, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    8. Jamie Robertsen & Nathalie Francken & Nadia Molenaers, 2015. "Determinants of the Flow of Bilateral Adaptation-Related Climate Change Financing to Sub-Saharan Africa," LICOS Discussion Papers 37315, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    9. Knack, Stephen, 2013. "Aid and donor trust in recipient country systems," Journal of Development Economics, Elsevier, vol. 101(C), pages 316-329.
    10. Knack, Stephen & Smets, Lodewijk, 2013. "Aid Tying and Donor Fragmentation," World Development, Elsevier, vol. 44(C), pages 63-76.
    11. Axel Dreher & Valentin F. Lang & Sebastian Ziaja, 2017. "Foreign Aid in Areas of Limited Statehood," CESifo Working Paper Series 6340, CESifo.
    12. Nathalie Ferrière, 2020. "Donors and implementing agencies: a quantitative analysis of delegation and fragmentation in humanitarian aid [Donneurs et acteurs de terrain : une étude quantitative de la délégation et de la frag," Working Papers halshs-02479415, HAL.
    13. Alain Le Roy & Jean-Michel Severino, 2023. "Diversification and fragmentation of public financing for development WP321 [Diversification et fragmentation du financement public du développement WP321]," Working Papers hal-04120982, HAL.
    14. Han, Lu & Koenig-Archibugi, Mathias & Opsahl, Tore, 2018. "The social network of international health aid," Social Science & Medicine, Elsevier, vol. 206(C), pages 67-74.
    15. Subhani Keerthiratne & Richard S.J. Tol, 2018. "Foreign Aid Concentration and Natural Disasters," Working Paper Series 0218, Department of Economics, University of Sussex Business School.
    16. Öhler, Hannes, 2013. "Do Aid Donors Coordinate Within Recipient Countries?," Working Papers 0539, University of Heidelberg, Department of Economics.
    17. repec:awi:wpaper:539 is not listed on IDEAS
    18. Alain Le Roy & Jean-Michel Severino, 2023. "Diversification and fragmentation of public financing for development WP321," Working Papers hal-04121908, HAL.
    19. Gehring, Kai & Michaelowa, Katharina & Dreher, Axel & Spörri, Franziska, 2017. "Aid Fragmentation and Effectiveness: What Do We Really Know?," World Development, Elsevier, vol. 99(C), pages 320-334.

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    More about this item

    Keywords

    Foreign aid; Transaction costs; Aid fragmentation;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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