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Assessing the contribution of donor agencies to aid effectiveness: The impact of World Bank preparation on project outcomes

This paper assesses the impact of World Bank project preparation on project outcomes. Using a stochastic frontier model, I generate a measure of World Bank project preparation duration based on variation in political economy factors that are otherwise exogenous to project outcomes. Panel analysis of project data finds that projects with longer preparation periods are significantly more likely to have satisfactory outcome ratings. This result is robust across a range of specifications but the effects are conditional on the degree of economic vulnerability. The impact of World Bank preparation is greater in countries experiencing debt problems. The impact of donor preparation identifies a positive contribution of development aid that is not subject to the usual fungibility critique.

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File URL: http://repec.library.villanova.edu/workingpapers/VSBEcon20.pdf
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Paper provided by Villanova School of Business Department of Economics and Statistics in its series Villanova School of Business Department of Economics and Statistics Working Paper Series with number 20.

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Date of creation: Jun 2012
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Handle: RePEc:vil:papers:20
Contact details of provider: Web page: http://www.villanova.edu/business/facultyareas/economics/

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  7. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
  8. Kilby, Christopher, 2013. "The political economy of project preparation: An empirical analysis of World Bank projects," Journal of Development Economics, Elsevier, vol. 105(C), pages 211-225.
  9. Christopher Kilby & Axel Dreher, 2009. "The Impact of Aid on Growth Revisited: Do Donor Motives Matter?," Ibero America Institute for Econ. Research (IAI) Discussion Papers 191, Ibero-America Institute for Economic Research.
  10. Kilby, Christopher, 2009. "The political economy of conditionality: An empirical analysis of World Bank loan disbursements," Journal of Development Economics, Elsevier, vol. 89(1), pages 51-61, May.
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  13. Stone, Randall W., 2008. "The Scope of IMF Conditionality," International Organization, Cambridge University Press, vol. 62(04), pages 589-620, October.
  14. Christopher Kilby, 2010. "Informal influence in the Asian Development Bank," Villanova School of Business Department of Economics and Statistics Working Paper Series 13, Villanova School of Business Department of Economics and Statistics.
  15. Hristos Doucouliagos & Martin Paldam, 2005. "The Aid Effectiveness Literature. The Sad Result of 40 Years of Research," Economics Working Papers 2005-15, School of Economics and Management, University of Aarhus.
  16. Thomas Barnebeck Andersen & Henrik Hansen & Thomas Markussen, 2004. "US Politics and World Bank IDA-Lending," Discussion Papers 05-06, University of Copenhagen. Department of Economics, revised May 2005.
  17. Andersen, Thomas Barnebeck & Harr, Thomas & Tarp, Finn, 2006. "On US politics and IMF lending," European Economic Review, Elsevier, vol. 50(7), pages 1843-1862, October.
  18. Kilby, Christopher, 2000. "Supervision and performance: the case of World Bank projects," Journal of Development Economics, Elsevier, vol. 62(1), pages 233-259, June.
  19. Christopher Kilby, 2010. "An empirical assessment of informal influence in the World Bank," Villanova School of Business Department of Economics and Statistics Working Paper Series 9, Villanova School of Business Department of Economics and Statistics.
  20. John Hudson & Paul Mosley, 2001. "Aid policies and growth: in search of the holy grail," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(7), pages 1023-1038.
  21. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
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  23. Dreher, Axel & Klasen, Stephan & Raymond, James & Werker, Eric, 2010. "The costs of favoritism: Is politically-driven aid less effective?," Center for European, Governance and Economic Development Research Discussion Papers 97, University of Goettingen, Department of Economics.
  24. Peter Boone, 1995. "Politics and the Effectiveness of Foreign Aid," NBER Working Papers 5308, National Bureau of Economic Research, Inc.
  25. José Cheibub & Jennifer Gandhi & James Vreeland, 2010. "Democracy and dictatorship revisited," Public Choice, Springer, vol. 143(1), pages 67-101, April.
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