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Proliferation and fragmentation: uphill struggle of aid effectiveness

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  • Jinhwan Oh
  • Yunjeong Kim

Abstract

Aid fragmentation is one of the hindrances to aid effectiveness. As a main contributing factor, proliferated aids from the donor side have been pointed out. In this regard, we first examine the main factors for the donors' proliferation and its links with the recipients' fragmentation, which have been asked in several studies, but are revisited again with a comprehensive up-to-date data set. We also examine whether a recipient country is indeed going to get worse off through fragmented aid or, more directly, by proliferated aid. The main findings are (1) donors tend to proliferate their aid disbursement as their aid budget increases; (2) the recipients' fragmentation is mainly due to the donors' proliferation, and this has been prevalent since the early stage of aid history; (3) non-monotonicity is shown between aid fragmentation and growth, given that economies of scale is dominant in the incipient stage of a recipient country's growth, but turns out to affect negatively in the long run; (4) therefore, the donors' proliferation will eventually harm the recipients' growth.

Suggested Citation

  • Jinhwan Oh & Yunjeong Kim, 2015. "Proliferation and fragmentation: uphill struggle of aid effectiveness," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 7(2), pages 192-209, June.
    • Handle: RePEc:taf:jdevef:v:7:y:2015:i:2:p:192-209
    DOI: 10.1080/19439342.2014.983537
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    References listed on IDEAS

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    1. 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.
    2. P. Guillaumont & L. Chauvet, 2001. "Aid and Performance: A Reassessment," Journal of Development Studies, Taylor & Francis Journals, vol. 37(6), pages 66-92.
    3. Arnab Acharya & Ana Teresa Fuzzo de Lima & Mick Moore, 2006. "Proliferation and fragmentation: Transactions costs and the value of aid," Journal of Development Studies, Taylor & Francis Journals, vol. 42(1), pages 1-21.
    4. Iñaki Aldasoro & Peter Nunnenkamp & Rainer Thiele, 2010. "Less aid proliferation and more donor coordination? The wide gap between words and deeds," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(7), pages 920-940.
    5. J. Vernon Henderson, 2000. "The Effects of Urban Concentration on Economic Growth," NBER Working Papers 7503, National Bureau of Economic Research, Inc.
    6. Morss, Elliott R., 1984. "Institutional destruction resulting from donor and project proliferation in Sub-Saharan African countries," World Development, Elsevier, vol. 12(4), pages 465-470, April.
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    Cited by:

    1. Jinhwan Oh, 2017. "Spread Or Concentrated: Where Is South Korean Inbound Education Aid Aimed And Where Should It Be Directed? A Comparison With The Japanese Case," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 29(2), pages 114-134, July.
    2. Wendala Gamaralalage Subhani Sulochana Keerthiratne, 2017. "Economic impact of natural disasters," Economics PhD Theses 0617, Department of Economics, University of Sussex Business School.
    3. 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.
    4. Michael Chasukwa & Dan Banik, 2019. "Bypassing Government: Aid Effectiveness and Malawi’s Local Development Fund," Politics and Governance, Cogitatio Press, vol. 7(2), pages 103-116.
    5. Kaplan, Lennart, 2020. "Systemic challenges and opportunities of Franco-German development cooperation," IDOS Discussion Papers 10/2020, German Institute of Development and Sustainability (IDOS).

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