Reducing the transaction costs of development assistance Ghana's multi-donor budget support (MDBS) experience from 2003 to 2007
This paper examines whether the structure of the Multi-Donor Budget Support (MDBS) in Ghana evolved over time to minimize transaction costs commonly found in accessing and delivering development assistance in multi-donor settings. While the MDBS was expected to reduce the transaction costs involved in dealing with multiple development agencies, it created three additional sources of transaction costs: coordination failures, the costs of collective action, and measurement costs. The answer that emerges from this paper is that the structure of the MDBS evolved to mitigate these transaction costs. The problems associated with coordination was addressed by delegating the policy dialogue to sector-specific groups aimed at reaching agreements over a narrower set of issues and amongst a smaller group of participants. Also, the MDBS reduced the cost of collective action by devising rules that allowed all the participating agencies to have a role in the decision-making process, and, in doing so, encouraged these agencies to increase the share of their contribution coming through the MDBS, rather than through large projects and off-budget disbursements. There was less success in reaching a settled view on how to reduce so-called measurement costs, however. While the group of development agencies made several attempts to overcome the difficulties in measuring progress in the program supported by the MDBS, it was not able to reach consensus on the extent to which the monitoring of the program should rely on outcome indicators. The Government did not favor the use of outcome indicators, and some development agencies placed greater emphasis on maintaining a dialogue around policy actions aimed at reaching the desired outcomes.
|Date of creation:||01 Nov 2007|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alston, Lee J. & Gillespie, William, 1989. "Resource coordination and transaction costs : A framework for analyzing the firm/market boundary," Journal of Economic Behavior & Organization, Elsevier, vol. 11(2), pages 191-212, March.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:4409. 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: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.