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Early vs. Late in Aid Partnerships and Implications for Tackling Aid Fragmentation

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Author Info

  • Frot, Emmanuel

    ()
    (Stockholm Institute of Transition Economics)

Abstract

Development aid donors disburse aid to many developing countries. This paper shows that whether a partnership is established early or late matters significantly for aid quantities. Donor countries allocate larger shares of their aid budgets to recipients that entered early in their portfolios. This effect is large compared to variations due to recipients' income differences, and matters even in the long run. Entry dates are weakly related to GDP per capita, but are influenced strongly by colonial past. On the other hand, colonial relationships explain only a small part of the observed variation in entry dates. These findings imply that donors, while continuously increasing their number of recipients, have allocated smaller aid quantities to new partnerships. This has direct consequences for aid fragmentation, with many donors disbursing small amounts to a recipient. I study a simple reform that eliminates ``small'' partnerships, but leaves unaffected donor aid budgets and developing countries receipts. The reform reshuffles only about 20 percent of all the aid disbursed in a year but drastically reduces fragmentation.

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Bibliographic Info

Paper provided by Stockholm Institute of Transition Economics, Stockholm School of Economics in its series SITE Working Paper Series with number 1.

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Length: 38 pages
Date of creation: 30 Apr 2009
Date of revision:
Handle: RePEc:hhs:hasite:0001

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Postal: Stockholm Institute of Transition Economics, Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden
Phone: (+46 8) 736 9670
Fax: (+46 8) 31 64 22
Web page: http://www.hhs.se/site/
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Related research

Keywords: Aid; Fragmentation.;

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Cited by:
  1. Olofsgård, Anders & Perrotta, Maria & Frot, Emmanuel, 2013. "Aid E ectiveness in Times of Political Change: Lessons from the Post-Communist Transition," SITE Working Paper Series 25, Stockholm Institute of Transition Economics, Stockholm School of Economics.
  2. Christopher Kilby, 2010. "What Determines the Size of Aid Projects?," Villanova School of Business Department of Economics and Statistics Working Paper Series 10, Villanova School of Business Department of Economics and Statistics.
  3. Olofsgård, Anders & Perrotta, Maria & Frot, Emmanuel, 2012. "Aid Motivation in Early and Mature Partnerships: Is there a difference?," SITE Working Paper Series 17, Stockholm Institute of Transition Economics, Stockholm School of Economics.

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