IDEAS home Printed from
   My bibliography  Save this paper

Beyond Planning: Markets and Networks for Better Aid


  • Owen Barder


The political economy of aid agencies is driven by incomplete information and multiple competing objectives and confounded by principal-agent and collective-action problems. Policies to improve aid rely too much on a planning paradigm that tries to ignore, rather than change, the political economy of aid. A considered combination of market mechanisms, networked collaboration, and collective regulation would be more likely to lead to significant improvements. A “collaborative market” for aid might include unbundling funding from aid management to create more explicit markets; better information gathered from the intended beneficiaries of aid; decentralized decision-making; a sharp increase in transparency and accountability of donor agencies; the publication of more information about results; pricing externalities; and new regulatory arrangements to make markets work. The aid system is in a political equilibrium, determined by deep characteristics of the aid relationship and the political economy of aid institutions. Reformers should seek to change that equilibrium rather than try to move away from it. The priority should be on reforms that put pressure on the aid system to evolve in the right direction rather than on grand designs.

Suggested Citation

  • Owen Barder, 2009. "Beyond Planning: Markets and Networks for Better Aid," Working Papers 185, Center for Global Development.
  • Handle: RePEc:cgd:wpaper:185

    Download full text from publisher

    File URL:
    Download Restriction: no


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

    Cited by:

    1. Hartmann, Simon, 2011. "Political constraints on division of labor in development policy across countries: A proposal for a more viable coordination procedure at the EU level," Working Papers 28, Österreichische Forschungsstiftung für Internationale Entwicklung (ÖFSE) / Austrian Foundation for Development Research.
    2. Katinka Cranenburgh & Daniel Arenas, 2014. "Strategic and Moral Dilemmas of Corporate Philanthropy in Developing Countries: Heineken in Sub-Saharan Africa," Journal of Business Ethics, Springer, vol. 122(3), pages 523-536, July.
    3. repec:taf:rjapxx:v:16:y:2011:i:4:p:529-543 is not listed on IDEAS
    4. Matthew Dornan & Tess Newton Cain, 2014. "Regional Service Delivery among Pacific Island Countries: An Assessment," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 1(3), pages 541-560, September.
    5. Andy Sumner, 2010. "Global Poverty and the New Bottom Billion: What if Three-quarters of the World?s Poor Live in Middle-income Countries?," Working Papers 74, International Policy Centre for Inclusive Growth.
    6. Fritz, Livia & Raza, Werner, 2014. "Living up to Policy Coherence for Development? The OECD's disciplines on tied aid financing," Working Papers 49, Österreichische Forschungsstiftung für Internationale Entwicklung (ÖFSE) / Austrian Foundation for Development Research.
    7. George Mavrotas, 2011. "Security and Development: Delving Deeper into the Nexus," Chapters,in: Security and Development, chapter 1 Edward Elgar Publishing.
    8. David Booth, 2012. "Working with the Grain and Swimming against the Tide," Public Management Review, Taylor & Francis Journals, vol. 14(2), pages 163-180, February.
    9. Hartmann, Simon, 2013. "Collaborative capacity building as an approach to more effective development cooperation: Lessons from the nation building experience in Burundi (2002-2008)," Briefing Papers 7, Österreichische Forschungsstiftung für Internationale Entwicklung (ÖFSE) / Austrian Foundation for Development Research.
    10. Stephen Howes, 2014. "A Framework for Understanding Aid Effectiveness Determinants, Strategies and Tradeoffs," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 1(1), pages 58-72, January.
    11. repec:taf:rjapxx:v:16:y:2011:i:4:p:562-578 is not listed on IDEAS

    More about this item


    aid; aid reform; aid agencies; political economy; market mechanism; networks;

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    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:cgd:wpaper:185. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Publications Manager). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.