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Explaining Aid Project and Program Success: Findings from Asian Development Bank Interventions

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  • Feeny, Simon
  • Vuong, Vu

Abstract

This paper contributes to the aid effectiveness literature by examining the determinants of aid project and program success. Both macro (country level) and micro (project level) determinants are considered. The paper employs a variety of econometric techniques to examine evaluation data for countries in the Asia-Pacific from the Asian Development Bank (ADB) for period 1970–2010. At the macro level, the rate of per capita income growth is positively associated with aid project and program success. Aid interventions are found to have a lower probability of success in the Pacific and, surprisingly, in countries with higher levels of democracy. There is little association between project and program ratings and the level of governance. At the micro level, projects are more likely to be successful than programs, as are larger aid interventions. Interventions which received less funding than anticipated, possibly due to capacity constraints, are found to have a lower probability of success. Despite these statistically significant findings, both macro and micro variables contribute very little to the explanatory power of models explaining the variation in project and program outcomes. The paper concludes that the ADB should reconsider its performance based aid allocation model.

Suggested Citation

  • Feeny, Simon & Vuong, Vu, 2017. "Explaining Aid Project and Program Success: Findings from Asian Development Bank Interventions," World Development, Elsevier, vol. 90(C), pages 329-343.
  • Handle: RePEc:eee:wdevel:v:90:y:2017:i:c:p:329-343
    DOI: 10.1016/j.worlddev.2016.10.009
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    3. Eilers, Yota & Kluve, Jochen & Langbein, Jörg & Reiners, Lennart, 2023. "Volume, Risk, Complexity: What Makes Development Finance Projects Succeed or Fail?," IZA Discussion Papers 16691, Institute of Labor Economics (IZA).
    4. Gereben, Áron & Rop, Anton & Petriček, Matic & Winkler, Adalbert, 2019. "The impact of international financial institutions on small and medium enterprises: The case of EIB lending in Central and Eastern Europe," EIB Working Papers 2019/09, European Investment Bank (EIB).
    5. Steffen Eckhard & Vytautas Jankauskas & Elena Leuschner & Ian Burton & Tilman Kerl & Rita Sevastjanova, 2023. "The performance of international organizations: a new measure and dataset based on computational text analysis of evaluation reports," The Review of International Organizations, Springer, vol. 18(4), pages 753-776, October.
    6. Heinzel, Mirko & Reinsberg, Bernhard, 2024. "Trust funds and the sub-national effectiveness of development aid: evidence from the World Bank," LSE Research Online Documents on Economics 122593, London School of Economics and Political Science, LSE Library.
    7. Terence Wood & Sabit Otor & Matthew Dornan, 2022. "Why are aid projects less effective in the Pacific?," Development Policy Review, Overseas Development Institute, vol. 40(3), May.
    8. Terence Wood & Sabit Otor & Matthew Dornan, 2020. "Australian aid projects: What works, where projects work and how Australia compares," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 7(2), pages 171-186, May.
    9. Silvia Marchesi & Tania Masi & Saumik Paul, 2021. "Project Aid and Firm Performance," Working Papers 479, University of Milano-Bicocca, Department of Economics, revised Sep 2021.
    10. Alam, Muneeza & Herrera Dappe, Matías & Melecky, Martin & Goldblatt, Ran, 2022. "Wider economic benefits of transport corridors: Evidence from international development organizations," Journal of Development Economics, Elsevier, vol. 158(C).
    11. Silvia Marchesi & Tania Masi, 2019. "Allocation of Implementing Power: Evidence from World Bank Projects," Development Working Papers 447, Centro Studi Luca d'Agliano, University of Milano.
    12. Silvia Marchesi & Tania Masi, 2021. "Delegation of implementation in project aid," The Review of International Organizations, Springer, vol. 16(3), pages 655-687, July.

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