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The quality of foreign aid : country selectivity or donors incentives?

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  • Wane, Waly

Abstract

The author investigates the determinants of foreign aid quality. He shows that design effects are a crucial component of quality. He thus establishes that donors have an impact on the quality of the foreign assistance they provide. The author also shows both theoretically and empirically that the quality of aid is endogenous to the relationship between the donor agency and the recipient government. Highly capable and accountable governments accept only well-designed projects, whereas governments with low accountability may accept poor quality projects either because they are unable to assess the worth of the projects or they will benefit personally.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3325.

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Date of creation: 01 Jun 2004
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Handle: RePEc:wbk:wbrwps:3325

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Related research

Keywords: Banks&Banking Reform; Development Economics&Aid Effectiveness; Decentralization; Poverty Monitoring&Analysis; Public Health Promotion; Development Economics&Aid Effectiveness; Banks&Banking Reform; Poverty Monitoring&Analysis; Health Economics&Finance; Health Monitoring&Evaluation;

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References

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Citations

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Cited by:
  1. Tierney, Michael J. & Nielson, Daniel L. & Hawkins, Darren G. & Roberts, J. Timmons & Findley, Michael G. & Powers, Ryan M. & Parks, Bradley & Wilson, Sven E. & Hicks, Robert L., 2011. "More Dollars than Sense: Refining Our Knowledge of Development Finance Using AidData," World Development, Elsevier, vol. 39(11), pages 1891-1906.
  2. Ravallion, Martin, 2011. "Knowledgeable bankers ? the demand for research in World Bank operations," Policy Research Working Paper Series 5892, The World Bank.
  3. Kenny, Charles, 2006. "What is effective aid? How would donors allocate It?," Policy Research Working Paper Series 4005, The World Bank.
  4. Denizer, Cevdet & Kaufmann, Daniel & Kraay, Aart, 2011. "Good countries or good projects ? macro and micro correlates of World Bank project performance," Policy Research Working Paper Series 5646, The World Bank.
  5. Bandeira, Pablo, 2009. "El desarrollo institucional en el contexto de la ineficacia de la ayuda: ¿qué podemos hacer?
    [Promoting institutional development in the context of actual aid ineffectiveness: what can we do?]    ," MPRA Paper 13372, University Library of Munich, Germany.
  6. Liutang Gong & Yuzhe Zhang & Heng-fu Zou, 2008. "Foreign Aid, Public Spending, Optimal Fiscal and Monetary Policies, and Long-Run Growth," CEMA Working Papers 309, China Economics and Management Academy, Central University of Finance and Economics.
  7. J. Vernon Henderson & Yong Suk Lee, 2011. "Organization of Disaster Aid Delivery: Spending Your Donations," NBER Working Papers 17707, National Bureau of Economic Research, Inc.
  8. Smets, Lodewijk & Knack, Stephen & Molenaers, Nadia, 2012. "Political ideology, quality at entry and the success of economic reform programs," Policy Research Working Paper Series 6130, The World Bank.

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