Core funding and the performance of international organizations: Evidence from UNDP projects

Scholarship on the administration of international organizations (IOs) has extensively discussed how autonomy influences their performance. While some argue that autonomy increases performance through greater adaptability, others warn that it may increase the risk of agency slack. Authors typically distinguish between three types of performance: output, outcome, and impact performance. We focus on core funding as a key source of IO autonomy and argue that projects with more core funding show decreased output performance but an increased outcome and impact performance. Our empirical analysis relies on results from data on up to 3590 development projects run by the United Nations Development Program (UNDP) in 128 recipient countries between 2004 and 2020. Subsequently, we test the impact of more core funding on project volumes (output performance), objectives achieved in individual projects (outcome performance), and their effects on sub‐national human development in project regions (impact performance). Our findings suggest that, although reliance on core resources is associated with lower output performance (less funding), it may result in stronger outcome and impact performance, as reflected by more objectives achieved and a higher sub‐national HDI where UNDP projects are implemented. Our findings have important implications for debates on the effectiveness of global governance.