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Can donor coordination solve the aid proliferation problem ?

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  • Rahman, Aminur
  • Sawada, Yasuyuki

Abstract

The paper augments Holmstrom’s (1982) team production model in the context of aid effectiveness. The analysis shows how donor proliferation leads to inefficient supply of aid in the recipient country because of the free-riding problem faced by the donors. The empirical findings support the theoretical prediction with regard to donor proliferation. However, this raises the question whether the current efforts in the international aid community with regard to donor coordination can in fact solve the aid proliferation problem.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5251.

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Date of creation: 01 Mar 2010
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Handle: RePEc:wbk:wbrwps:5251

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  1. Burnside, Craig & Dollar, David, 1997. "Aid, policies, and growth," Policy Research Working Paper Series 1777, The World Bank.
  2. Arnab Acharya & Ana Teresa Fuzzo de Lima & Mick Moore, 2006. "Proliferation and fragmentation: Transactions costs and the value of aid," Journal of Development Studies, Taylor & Francis Journals, vol. 42(1), pages 1-21.
  3. Michael Lokshin, 2006. "Difference-based semiparametric estimation of partial linear regression models," Stata Journal, StataCorp LP, StataCorp LP, vol. 6(3), pages 377-383, September.
  4. Knack, Stephen & Rahman, Aminur, 2004. "Donor fragmentation and bureaucratic quality in aid recipients," Policy Research Working Paper Series 3186, The World Bank.
  5. David Roodman, 2006. "Aid Project Proliferation and Absorptive Capacity," Working Papers 75, Center for Global Development.
  6. Kimura, Hidemi & Mori, Yuko & Sawada, Yasuyuki, 2012. "Aid Proliferation and Economic Growth: A Cross-Country Analysis," World Development, Elsevier, vol. 40(1), pages 1-10.
  7. Yatchew, A., 1997. "An elementary estimator of the partial linear model," Economics Letters, Elsevier, vol. 57(2), pages 135-143, December.
  8. Bengt Holmstrom, 1981. "Moral Hazard in Teams," Discussion Papers, Northwestern University, Center for Mathematical Studies in Economics and Management Science 471, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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Cited by:
  1. KIMURA Hidemi & SAWADA Yasuyuki & MORI Yuko, 2007. "Aid Proliferation and Economic Growth: A Cross-Country Analysis," Discussion papers 07044, Research Institute of Economy, Trade and Industry (RIETI).

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