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Aid fragmentation and donor transaction costs

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  • Anderson, Edward

Abstract

This paper shows that the fragmentation of bilateral donors’ aid across recipient countries tends to raise their transaction costs. It is estimated that bilateral donors could reduce their transaction costs by US$2.5 billion per year through greater recipient country specialisation.

Suggested Citation

  • Anderson, Edward, 2012. "Aid fragmentation and donor transaction costs," Economics Letters, Elsevier, vol. 117(3), pages 799-802.
  • Handle: RePEc:eee:ecolet:v:117:y:2012:i:3:p:799-802 DOI: 10.1016/j.econlet.2012.08.034
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    References listed on IDEAS

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    1. Head, Keith & Mayer, Thierry & Ries, John, 2010. "The erosion of colonial trade linkages after independence," Journal of International Economics, Elsevier, pages 1-14.
    2. Djankov, Simeon & Montalvo, Jose G. & Reynal-Querol, Marta, 2009. "Aid with multiple personalities," Journal of Comparative Economics, Elsevier, vol. 37(2), pages 217-229, June.
    3. Knack, Stephen & Rahman, Aminur, 2007. "Donor fragmentation and bureaucratic quality in aid recipients," Journal of Development Economics, Elsevier, vol. 83(1), pages 176-197, May.
    4. World Bank, 2011. "World Development Indicators 2011," World Bank Publications, The World Bank, number 2315.
    5. 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.
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    Citations

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    Cited by:

    1. Fløgstad, Cathrin & Hagen, Rune Jansen, 2017. "Aid Dispersion: Measurement in Principle and Practice," World Development, Elsevier, pages 232-250.
    2. Knack, Stephen, 2012. "When do donors trust recipient country systems ?," Policy Research Working Paper Series 6019, The World Bank.
    3. Jamie Robertsen & Nathalie Francken & Nadia Molenaers, 2015. "Determinants of the Flow of Bilateral Adaptation-Related Climate Change Financing to Sub-Saharan Africa," LICOS Discussion Papers 37315, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    4. Kai Gehring & Katharina Michaelowa & Axel Dreher & Franziska Spörri, 2015. "Do we know what we think we know? Aid fragmentation and effectiveness revisited," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 185, Courant Research Centre PEG.
    5. Subhani Keerthiratne & Richard S.J. Tol, 2018. "Foreign Aid Concentration and Natural Disasters," Working Paper Series 0218, Department of Economics, University of Sussex.
    6. Knack, Stephen, 2013. "Aid and donor trust in recipient country systems," Journal of Development Economics, Elsevier, vol. 101(C), pages 316-329.
    7. Knack, Stephen & Smets, Lodewijk, 2013. "Aid Tying and Donor Fragmentation," World Development, Elsevier, vol. 44(C), pages 63-76.
    8. Öhler, Hannes, 2013. "Do Aid Donors Coordinate Within Recipient Countries?," Working Papers 539, University of Heidelberg, Department of Economics.
    9. Axel Dreher & Valentin F. Lang & Sebastian Ziaja, 2017. "Foreign Aid in Areas of Limited Statehood," CESifo Working Paper Series 6340, CESifo Group Munich.
    10. repec:eee:wdevel:v:99:y:2017:i:c:p:320-334 is not listed on IDEAS

    More about this item

    Keywords

    Foreign aid; Transaction costs; Aid fragmentation;

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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