IDEAS home Printed from https://ideas.repec.org/a/wly/jintdv/v9y1997i4p483-495.html
   My bibliography  Save this article

Principals, Agents And The Failings Of Conditionality

Author

Listed:
  • TONY KILLICK

    (Senior Research Fellow, Overseas Development Institute, London, UK)

Abstract

This article examines the effectiveness of policy conditionality by international and other aid donors. The subject is treated within a principal-agent framework and is based on evidence from a sample of 21 developing countries, mainly relating to experiences with World Bank structural adjustment programmes. The evidence provides strong support for the overall hypothesis that conditionality-applying donors (specifically the BWIs) are often unable to put in place a system of rewards and punishments sufficient to overcome the frequent perceived conflicts of interest between themselves and recipient governments. Difficulties which donors experience in punishing non-implementation of policy stipulations are among the chief reasons for this result. In the event of serious donor-recipient disagreements, domestic politics usually dominates. The use of donor financial leverage is not a substitute for weak domestic institutions or 'political will'. We also find that the conditions necessary for conditionality to provide a 'technology of precommitment' are often not satisfied. The BWIs and other donors should recognize that their main contribution to policy reform in developing countries has been through influence on the contemporary intellectual climate, and persuasion of governments through regular contacts. © 1997 by John Wiley & Sons, Ltd.

Suggested Citation

  • Tony Killick, 1997. "Principals, Agents And The Failings Of Conditionality," Journal of International Development, John Wiley & Sons, Ltd., vol. 9(4), pages 483-495.
    • Handle: RePEc:wly:jintdv:v:9:y:1997:i:4:p:483-495
    DOI: 10.1002/(SICI)1099-1328(199706)9:4<483::AID-JID458>3.0.CO;2-S
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    References listed on IDEAS

    as
    1. Johnson, J.H. & Wasty, S.S., 1993. "Borrower Ownership of Adjustment Programs and the Political Economy of Reform," World Bank - Discussion Papers 199, World Bank.
    2. Bouton, Lawrence & Jones, Christine & Kiguel, Miguel, 1994. "Macroeconomic reform and growth in Africa : adjustment in Africa revisited," Policy Research Working Paper Series 1394, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Graham Bird, 2007. "The Imf: A Bird'S Eye View Of Its Role And Operations," Journal of Economic Surveys, Wiley Blackwell, vol. 21(4), pages 683-745, September.
    2. Arellano, Cristina & Bulír, Ales & Lane, Timothy & Lipschitz, Leslie, 2009. "The dynamic implications of foreign aid and its variability," Journal of Development Economics, Elsevier, vol. 88(1), pages 87-102, January.
    3. Tito Cordella & Giovanni Dell'Aricca, 2002. "Limits of Conditionality in Poverty Reduction Programs," IMF Staff Papers, Palgrave Macmillan, vol. 49(Special i), pages 68-86.
    4. Kletzer, Kenneth, 2005. "Aid and Sanctions," Santa Cruz Department of Economics, Working Paper Series qt5hq5d9gp, Department of Economics, UC Santa Cruz.
    5. Molenaers, Nadia & Dellepiane, Sebastian & Faust, Jorg, 2015. "Political Conditionality and Foreign Aid," World Development, Elsevier, vol. 75(C), pages 2-12.
    6. Pablo Yanguas, 2014. "Leader, Protester, Enabler, Spoiler: Aid Strategies and Donor Politics in Institutional Assistance," Development Policy Review, Overseas Development Institute, vol. 32(3), pages 299-312, May.
    7. Arjan de Haan & Ward Warmerdam, 2012. "The politics of aid revisited: a review of evidence on state capacity and elite commitment," Global Development Institute Working Paper Series esid-007-12, GDI, The University of Manchester.
    8. Leandro, Jose E. & Schafer, Hartwig & Frontini, Gaspar, 1999. "Towards A More Effective Conditionality: An Operational Framework," World Development, Elsevier, vol. 27(2), pages 285-300, February.
    9. Hackenesch, Christine, 2015. "It’s Domestic Politics, Stupid! EU Democracy Promotion Strategies Meet African Dominant Party Regimes," World Development, Elsevier, vol. 75(C), pages 85-96.
    10. Angelsen, Arild, 2013. "REDD+ as Performance-Based Aid: General Lessons and Bilateral Agreements of Norway," WIDER Working Paper Series 135, World Institute for Development Economic Research (UNU-WIDER).
    11. Dafe, Florence, 2018. "Fuelled power: oil, financiers and central bank policy in Nigeria," LSE Research Online Documents on Economics 89610, London School of Economics and Political Science, LSE Library.
    12. Peter Moll & Lodewijk Smets, 2020. "Is It the Journey That Matters? A Fresh Look at the Impact of World Bank Policy Lending," Journal of International Development, John Wiley & Sons, Ltd., vol. 32(7), pages 1194-1228, October.
    13. Lodewijk Smets & Stephen Knack & Nadia Molenaers, 2013. "Political ideology, quality at entry and the success of economic reform programs," The Review of International Organizations, Springer, vol. 8(4), pages 447-476, December.
    14. Alessia Isopi & Fabrizio Mattesini, 2009. "Good Donors or Good Recipients? A Repeated Moral Hazard Model of Aid Allocation," Discussion Papers 09/10, University of Nottingham, CREDIT.
    15. Elisabeth Paul, 2006. "A Survey of the Theoretical Economic Literature on Foreign Aid," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 20(1), pages 1-17, May.
    16. Ashok Chakravarti, 2012. "Institutions, Economic Performance and the Visible Hand," Books, Edward Elgar Publishing, number 14751.
    17. Arild Angelsen, 2017. "REDD+ as Result-based Aid: General Lessons and Bilateral Agreements of Norway," Review of Development Economics, Wiley Blackwell, vol. 21(2), pages 237-264, May.
    18. Oliveira Cruz, Valeria & McPake, Barbara, 2010. "The "aid contract" and its compensation scheme: A case study of the performance of the Ugandan health sector," Social Science & Medicine, Elsevier, vol. 71(7), pages 1357-1365, October.
    19. Omotunde E.G. JOHNSON, 2005. "Country Ownership Of Reform Programmes And The Implications For Conditionality," G-24 Discussion Papers 35, United Nations Conference on Trade and Development.
    20. Elena V McLean, 2015. "A strategic theory of international environmental assistance," Journal of Theoretical Politics, , vol. 27(2), pages 324-347, April.
    21. Howard White, 1998. "British aid and the White Paper on International Development: dressing a wolf in sheep's clothing in the emperor's new clothes?," Journal of International Development, John Wiley & Sons, Ltd., vol. 10(2), pages 151-166.
    22. Arild Angelsen, 2013. "REDD+ as Performance-Based Aid: General Lessons and Bilateral Agreements of Norway," WIDER Working Paper Series wp-2013-135, World Institute for Development Economic Research (UNU-WIDER).
    23. José Antonio Alonso & Carlos Garcimartín, 2011. "El impacto de la ayuda internacional sobre la calidad de las instituciones," EKONOMIAZ. Revista vasca de Economía, Gobierno Vasco / Eusko Jaurlaritza / Basque Government, vol. 77(02), pages 158-175.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Leandro, Jose E. & Schafer, Hartwig & Frontini, Gaspar, 1999. "Towards A More Effective Conditionality: An Operational Framework," World Development, Elsevier, vol. 27(2), pages 285-300, February.
    2. McCourt, Willy, 2003. "Political Commitment to Reform: Civil Service Reform in Swaziland," World Development, Elsevier, vol. 31(6), pages 1015-1031, June.
    3. James D. Wolfensohn & Nicholas Stern & Ian Goldin & Halsey Rogers & Mats Karlsson, 2002. "A Case for Aid : Building a Consensus for Development Assistance," World Bank Publications - Books, The World Bank Group, number 14260, December.
    4. Howard J. Shatz & David G. Tarr, 2017. "Exchange Rate Overvaluation and Trade Protection: Lessons from Experience," World Scientific Book Chapters, in: Trade Policies for Development and Transition, chapter 5, pages 115-127, World Scientific Publishing Co. Pte. Ltd..
    5. Peter Quartey, 2005. "Innovative ways of making aid effective in Ghana: tied aid versus direct budgetary support," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(8), pages 1077-1092.
    6. Willy McCourt, 2018. "Towards “cognitively complex” problem‐solving: Six models of public service reform," Development Policy Review, Overseas Development Institute, vol. 36(S2), pages 748-768, September.
    7. Presbitero, Andrea F., 2016. "Too much and too fast? Public investment scaling-up and absorptive capacity," Journal of Development Economics, Elsevier, vol. 120(C), pages 17-31.
    8. Easterly, William & Loayza, Norman & Montiel, Peter, 1997. "Has Latin America's post-reform growth been disappointing?," Journal of International Economics, Elsevier, vol. 43(3-4), pages 287-311, November.
    9. Ben Cormier & Mark S. Manger, 2022. "Power, ideas, and World Bank conditionality," The Review of International Organizations, Springer, vol. 17(3), pages 397-425, July.
    10. Vaughn F. Graham, 2017. "Toward a Conceptual Expansion of Ownership and Post‐2015 Global Development Policy: Illustrations from the Jamaican Experience," Development Policy Review, Overseas Development Institute, vol. 35(3), pages 373-395, May.
    11. Sebastian Edwards, 2015. "Economic Development and the Effectiveness of Foreign Aid: A Historical Perspective," Kyklos, Wiley Blackwell, vol. 68(3), pages 277-316, August.
    12. te Lintelo, Dolf J.H. & Lakshman, Rajith W.D., 2015. "Equate and Conflate: Political Commitment to Hunger and Undernutrition Reduction in Five High-Burden Countries," World Development, Elsevier, vol. 76(C), pages 280-292.
    13. Yago, Milton & Morgan, Wyn, 2008. "The impact of policy reversal on economic performance in Sub-Saharan Africa," European Journal of Political Economy, Elsevier, vol. 24(1), pages 88-106, March.
    14. Turan Subasat, 2008. "Exchange Rate Policies: Fact or Fiction in the Rise of High Performance Asian Economies," Working Papers 0802, Izmir University of Economics.
    15. Raul Hopkins & Andrew Powell & Amlan Roy & Christopher L. Gilbert, 1997. "The World Bank And Conditionality," Journal of International Development, John Wiley & Sons, Ltd., vol. 9(4), pages 507-516.
    16. Brinkerhoff, Derick W., 1996. "Process perspectives on policy change: Highlighting implementation," World Development, Elsevier, vol. 24(9), pages 1395-1401, September.
    17. Tony Killick, 1996. "Principals, Agents and the Limitations of BWI Conditionality," The World Economy, Wiley Blackwell, vol. 19(2), pages 211-229, March.
    18. Derick W. Brinkerhoff, 2016. "Building political will for HIV response: an operational model and strategy options," International Journal of Health Planning and Management, Wiley Blackwell, vol. 31(4), pages 470-487, October.
    19. McCourt, Willy, 2013. "Models of public service reform : a problem-solving approach," Policy Research Working Paper Series 6428, The World Bank.
    20. Claessens, Stijn & Detragiache, Enrica & Kanbur, Ravi & Wickham, Peter, 1996. "Analytical aspects of the debt problems of heavily indebted poor countries," Policy Research Working Paper Series 1618, The World Bank.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:jintdv:v:9:y:1997:i:4:p:483-495. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/journal/5102/home .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.