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What Determines the Size of Aid Projects?

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Abstract

Over the last few years, considerable attention has focused on aid fragmentation, the proliferation of donors and projects in developing countries. Aid fragmentation has continued to increase despite international efforts to foster donor coordination. One possible implication of fragmentation is smaller aid projects, potentially with the result of more administrative work for overtaxed recipient governments per dollar of aid received. In principle, project size can be a function of donor characteristics, recipient characteristics, donor-recipient relations, and the type of projects funded. This paper makes use of PLAID data on bilateral aid commitments, sector, and funding agency to explore the determinants of project size and to better understand the forces driving aid fragmentation. To the extent that project size is driven by the sectoral composition or purpose of aid, the associated administrative costs may be justified. Variations due to other factors, e.g., a donor's administrative structure or bureaucratic interests, provide a stronger case for reforms.

Suggested Citation

  • 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.
    • Handle: RePEc:vil:papers:10
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    2. Fløgstad, Cathrin & Hagen, Rune Jansen, 2017. "Aid Dispersion: Measurement in Principle and Practice," World Development, Elsevier, vol. 97(C), pages 232-250.
    3. Suzuki, Mao, 2020. "Profits before patients? Analyzing donors’ economic motives for foreign aid in the health sector," World Development, Elsevier, vol. 132(C).
    4. Ali Compaoré & Abrams M.E. Tagem, 2022. "Does aid fragmentation affect tax revenue dynamics in developing countries?: Observations with new tax data," WIDER Working Paper Series wp-2022-99, World Institute for Development Economic Research (UNU-WIDER).
    5. Feeny, Simon & Vuong, Vu, 2017. "Explaining Aid Project and Program Success: Findings from Asian Development Bank Interventions," World Development, Elsevier, vol. 90(C), pages 329-343.
    6. Ayse Kaya & Byungwon Woo, 2022. "China and the Asian Infrastructure Investment Bank (AIIB): Chinese Influence Over Membership Shares?," The Review of International Organizations, Springer, vol. 17(4), pages 781-813, October.
    7. Christopher Selvarajah, 2014. "Foreign aid imperatives in the Greater Mekong Subregion: case studies of Australian, Japanese and Thai Aid Coordination," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 21(1), pages 23-65, June.
    8. Abbas, Syed Ali & Selvanathan, Eliyathamby A. & Selvanathan, Saroja & Bandaralage, Jayatilleke S., 2021. "Are remittances and foreign aid interlinked? Evidence from least developed and developing countries," Economic Modelling, Elsevier, vol. 94(C), pages 265-275.
    9. Liya Palagashvili & Claudia R. Williamson, 2021. "Grading foreign aid agencies: Best practices across traditional and emerging donors," Review of Development Economics, Wiley Blackwell, vol. 25(2), pages 654-676, May.
    10. Gordon D Cumming, 2017. "A Prototypical Case in the Making? Challenging Comparative Perspectives on French Aid," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 29(1), pages 19-36, January.
    11. M. Rodwan Abouharb & David Cingranelli & Mikhail Filippov, 2019. "Too Many Cooks: Multiple International Principals Can Spoil the Quality of Governance," Social Sciences, MDPI, vol. 8(5), pages 1-22, May.
    12. 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.
    13. Knack, Stephen & Rogers, F. Halsey & Eubank, Nicholas, 2011. "Aid Quality and Donor Rankings," World Development, Elsevier, vol. 39(11), pages 1907-1917.
    14. Yanguas, Pablo & Hulme, David, 2015. "Barriers to Political Analysis in Aid Bureaucracies: From Principle to Practice in DFID and the World Bank," World Development, Elsevier, vol. 74(C), pages 209-219.
    15. Fumitaka Furuoka, 2017. "Determinants of China's and Japan's Foreign Aid Allocations in Africa," African Development Review, African Development Bank, vol. 29(3), pages 376-388, September.

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    More about this item

    Keywords

    Foreign Aid; Aid Fragmentation; PLAID;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid

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