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Donor fragmentation and bureaucratic quality in aid recipients

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  • Knack,Stephen
  • Rahman, Aminur

Abstract

This paper analyzes the impact of donor fragmentation on the quality of government bureaucracy in aid-recipient nations. A formal model of a donor's decision to hire government administrators to manage donor-funded projects predicts that the number of administrators hired declines as the donor's share of other projects in the country increases, and as the donor's"altruism"(concern for the success of other donors'projects) increases. These hypotheses are supported by cross-country empirical tests using an index of bureaucratic quality available for aid-recipient nations over the 1982-2001 period. Declines in bureaucratic quality are associated with higher donor fragmentation (reflecting the presence of many donors, each with a small share of aid), and with smaller shares of aid coming from multilateral agencies, a proxy for donor"altruism."

Suggested Citation

  • Knack,Stephen & Rahman, Aminur, 2004. "Donor fragmentation and bureaucratic quality in aid recipients," Policy Research Working Paper Series 3186, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3186
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    References listed on IDEAS

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    1. Martens,Bertin & Mummert,Uwe & Murrell,Peter & Seabright,Paul, 2008. "The Institutional Economics of Foreign Aid," Cambridge Books, Cambridge University Press, number 9780521055390, April.
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    12. Stephen Knack, 2001. "Aid Dependence and the Quality of Governance: Cross-Country Empirical Tests," Southern Economic Journal, Southern Economic Association, vol. 68(2), pages 310-329, October.
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    More about this item

    Keywords

    Public Health Promotion; Health Monitoring&Evaluation; Decentralization; Health Economics&Finance; Development Economics&Aid Effectiveness; ICT Policy and Strategies; Economic Adjustment and Lending;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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