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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. Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, The RAND Corporation, vol. 13(2), pages 324-340, Autumn.
  2. David Roodman, 2006. "Aid Project Proliferation and Absorptive Capacity," Working Papers, Center for Global Development 75, Center for Global Development.
  3. Knack, Stephen & Rahman, Aminur, 2007. "Donor fragmentation and bureaucratic quality in aid recipients," Journal of Development Economics, Elsevier, Elsevier, vol. 83(1), pages 176-197, May.
  4. KIMURA Hidemi & SAWADA Yasuyuki & MORI Yuko, 2007. "Aid Proliferation and Economic Growth: A Cross-Country Analysis," Discussion papers, Research Institute of Economy, Trade and Industry (RIETI) 07044, Research Institute of Economy, Trade and Industry (RIETI).
  5. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, American Economic Association, vol. 90(4), pages 847-868, September.
  6. 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.
  7. Yatchew, A., 1997. "An elementary estimator of the partial linear model," Economics Letters, Elsevier, Elsevier, vol. 57(2), pages 135-143, December.
  8. 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, Taylor & Francis Journals, vol. 42(1), pages 1-21.
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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, Research Institute of Economy, Trade and Industry (RIETI) 07044, Research Institute of Economy, Trade and Industry (RIETI).

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