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Donor fragmentation and bureaucratic quality in aid recipients

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  • Knack, Stephen
  • Rahman, Aminur

Abstract

This paper analyzes the impact of donor fragmentation on the quality of government bureaucracy in aid-recipient nations. A formal model of a donor's decision to hire government administrators to manage donor-funded projects predicts that the number of administrators hired declines as the donor's share of other projects in the country increases, and as the donor's"altruism"(concern for the success of other donors'projects) increases. These hypotheses are supported by cross-country empirical tests using an index of bureaucratic quality available for aid-recipient nations over the 1982-2001 period. Declines in bureaucratic quality are associated with higher donor fragmentation (reflecting the presence of many donors, each with a small share of aid), and with smaller shares of aid coming from multilateral agencies, a proxy for donor"altruism."

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3186.

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Date of creation: 01 Jan 2004
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Handle: RePEc:wbk:wbrwps:3186

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Keywords: Economic Adjustment and Lending; Decentralization; Health Economics&Finance; Development Economics&Aid Effectiveness; Public Health Promotion; Development Economics&Aid Effectiveness; Economic Adjustment and Lending; Health Economics&Finance; ICT Policy and Strategies; Health Monitoring&Evaluation;

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  1. O'Connell, Stephen A. & Soludo, Charles C., 2001. "Aid Intensity in Africa," World Development, Elsevier, vol. 29(9), pages 1527-1552, September.
  2. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
  3. William Easterly, 2002. "The cartel of good intentions: The problem of bureaucracy in foreign aid," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 5(4), pages 223-250.
  4. Stephen Knack, 2001. "Aid Dependence and the Quality of Governance: Cross-Country Empirical Tests," Southern Economic Journal, Southern Economic Association, vol. 68(2), pages 310-329, October.
  5. Anand Swamy & Stephen Knack & Young Lee & Omar Azfar, 2000. "Gender and Corruption," Center for Development Economics 158, Department of Economics, Williams College.
  6. DeLong, J. Bradford & Eichengreen, Barry, 1991. "The Marshall Plan: History's Most Successful Structural Adjustment Program," Department of Economics, Working Paper Series qt3b1108bj, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  7. Martens,Bertin & Mummert,Uwe & Murrell,Peter & Seabright,Paul, 2008. "The Institutional Economics of Foreign Aid," Cambridge Books, Cambridge University Press, number 9780521055390.
  8. Azam, Jean-Paul & Devarajan, Shantayanan & O'Connell, Stephen A., 1999. "Aid dependence reconsidered," Policy Research Working Paper Series 2144, The World Bank.
  9. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," Journal of Law, Economics and Organization, Oxford University Press, vol. 15(1), pages 222-79, April.
  10. Brautigam, Deborah A & Knack, Stephen, 2004. "Foreign Aid, Institutions, and Governance in Sub-Saharan Africa," Economic Development and Cultural Change, University of Chicago Press, vol. 52(2), pages 255-85, January.
  11. A. Chong & C. Calderón, 2000. "Causality and Feedback Between Institutional Measures and Economic Growth," Economics and Politics, Wiley Blackwell, vol. 12(1), pages 69-81, 03.
  12. Keefer, Philip & Knack, Stephen, 1997. "Why Don't Poor Countries Catch Up? A Cross-National Test of Institutional Explanation," Economic Inquiry, Western Economic Association International, vol. 35(3), pages 590-602, July.
  13. Manishi Prasad & Peter Wahlqvist & Rich Shikiar & Ya-Chen Tina Shih, 2004. "A," PharmacoEconomics, Springer Healthcare | Adis, vol. 22(4), pages 225-244.
  14. P. Lundborg, 1998. "Foreign Aid and International Support as a Gift Exchange," Economics and Politics, Wiley Blackwell, vol. 10(2), pages 127-142, 07.
  15. 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.
  16. Stephen Knack & Omar Azfar, 2003. "Trade intensity, country size and corruption," Economics of Governance, Springer, vol. 4(1), pages 1-18, 04.
  17. repec:fth:oxesaf:99-5 is not listed on IDEAS
  18. Kanbur, Ravi & Sandler, Todd & Morrison, Kevin, 1999. "The Future of Development Assistance: Common Pools and International Public Goods," Staff General Research Papers 1629, Iowa State University, Department of Economics.
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