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The cartel of good intentions: the problem of bureaucracy in foreign aid

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Author Info
William Easterly

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Abstract

Well-meaning national and international bureaucracies dispense foreign aid under conditions in which bureaucracy fails. The environment that created aid bureaucracies led those organizations to (a) define their output as money disbursed rather than service delivered, (b) produce many low-return observable outputs (glossy reports and "frameworks") and few high-return less observable activities like ex - post evaluation, (c) engage in obfuscation, spin control, and amnesia (always describing aid efforts as "new and improved") exhibiting little learning from the past, (d) put enormous demands on scarce administrative skills in poor countries. To change this unhappy equilibrium, policymakers in rich and poor countries should experiment with decentralized markets, matching those who want to help the poor with the poor themselves freely expressing their needs and aspirations.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal The Journal of Policy Reform.

Volume (Year): 5 (2002)
Issue (Month): 4 (December)
Pages: 223-250
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Handle: RePEc:taf:jpolrf:v:5:y:2002:i:4:p:223-250

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Related research
Keywords: Foreign Aid; Economic Development; Bureaucracy;

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Daniel Kaufmann & Massimo Mastruzzi & Diego Zavaleta, 2003. "Sustained Macroeconomic Reforms, Tepid Growth: A Governance Puzzle in Bolivia?," Development and Comp Systems 0308003, EconWPA. [Downloadable!]
  2. William Easterly, 2002. "The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262550423.
  3. Andrei Shleifer & Robert W. Vishny, 1998. "The Quality of Government," Harvard Institute of Economic Research Working Papers 1847, Harvard - Institute of Economic Research.
    Other versions:
  4. Simeon Djankov & Caralee McLiesh & Tatiana Nenova & Andrei Shleifer, 2001. "Who Owns the Media?," Harvard Institute of Economic Research Working Papers 1919, Harvard - Institute of Economic Research. [Downloadable!]
    Other versions:
  5. Pritchett, Lant & Filmer, Deon, 1999. "What education production functions really show: a positive theory of education expenditures," Economics of Education Review, Elsevier, vol. 18(2), pages 223-239, April. [Downloadable!] (restricted)
  6. Tirole, Jean, 1994. "The Internal Organization of Government," Oxford Economic Papers, Oxford University Press, vol. 46(1), pages 1-29, January. [Downloadable!] (restricted)
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  7. Devesh Kapur, 2002. "Do as I Say Not as I Do: A Critique of G-7 Proposals on Reforming the MDBs," Working Papers 16, Center for Global Development. [Downloadable!]
  8. Easterly, William, 2005. "What did structural adjustment adjust?: The association of policies and growth with repeated IMF and World Bank adjustment loans," Journal of Development Economics, Elsevier, vol. 76(1), pages 1-22, February. [Downloadable!] (restricted)
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  9. Filmer, Deon & Hammer, Jeffrey & Pritchett, Lant, 1998. "Health policy in poor countries : weak links in the chain," Policy Research Working Paper Series 1874, The World Bank. [Downloadable!]
  10. Pritchett, Lant & Woolcock, Michael, 2004. "Solutions When the Solution is the Problem: Arraying the Disarray in Development," World Development, Elsevier, vol. 32(2), pages 191-212, February. [Downloadable!] (restricted)
  11. Ravallion, Martin & Wodon, Quentin, 1999. "Does child labor displace schooling? - evidence on behavioral responses to an enrollment subsidy," Policy Research Working Paper Series 2116, The World Bank. [Downloadable!]
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  12. Easterly, William, 1999. "The ghost of financing gap: testing the growth model used in the international financial institutions," Journal of Development Economics, Elsevier, vol. 60(2), pages 423-438, December. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Sanjay Jain, 2007. "Project Assistance versus Budget Support: An Incentive-Theoretic Analysis of Aid Conditionality," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 143(4), pages 694-719, December. [Downloadable!] (restricted)
  2. Joshua Aizenman, 2005. "Ex Ante Carrots instead of Ex Post Sticks: Two Examples," NBER Working Papers 11242, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Graham Bird, 2005. "Over-optimism and the IMF," Department of Economics Discussion Papers 0505, Department of Economics, University of Surrey. [Downloadable!]
    Other versions:
  4. Heckelman, Jac & Knack, Stephen, 2005. "Foreign aid and market-liberalizing reform," Policy Research Working Paper Series 3557, The World Bank. [Downloadable!]
    Other versions:
  5. Anna Fruttero & Varun Gauri, 2005. "The Strategic Choices of NGOs: Location Decisions in Rural Bangladesh1," The Journal of Development Studies, Taylor and Francis Journals, vol. 41(5), pages 759-787, July. [Downloadable!] (restricted)
  6. Michaelowa, Katharina & Borrmann, Axel, 2005. "What Determines Evaluation Outcomes? - Evidence from Bi- and Multilateral Development Cooperation -," Discussion Paper Series 26176, Hamburg Institute of International Economics. [Downloadable!]
  7. Knack, Stephen & Rahman, Aminur, 2004. "Donor fragmentation and bureaucratic quality in aid recipients," Policy Research Working Paper Series 3186, The World Bank. [Downloadable!]
    Other versions:
  8. Knack, Stephen, 2008. "Sovereign rents and the quality of tax policy and administration," Policy Research Working Paper Series 4773, The World Bank. [Downloadable!]
  9. Anna Fruttero & Varun Gauri, 2003. "Location decisions and nongovernmental organization motivation : evidence from rural Bangladesh," Policy Research Working Paper Series 3176, The World Bank. [Downloadable!]
  10. Anwar, Mumtaz, 2006. "The Political Economy Of International Financial Institutions’ Lending To Pakistan," MPRA Paper 5601, University Library of Munich, Germany, revised 01 Dec 2006. [Downloadable!]
  11. Bigsten, Arne, 2006. "Donor coordination and the uses of aid," Working Papers in Economics 196, Göteborg University, Department of Economics. [Downloadable!]
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