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Can Process Conditionality Enhance Aid Effectiveness? The Role of Bureaucratic Interest and Public Pressure


  • Michaelowa, Katharina
  • Hefeker, Carsten


Can process conditionality really enhance poverty reduction in developing countries? This question is addressed in the framework of a politico-economic model considering political distortions both on the recipient and on the donor side. It turns out that process conditionality is a very useful tool to raise the welfare of the poor as long as the international aid organizations hold all necessary information to assess the political situation in recipient countries and to select the true representatives of the poor into a participatory process. If they do not hold this information or if other bureaucratic interests reduce their incentive to acquire this information, process conditionality loses its effectiveness in achieving the desired objective.

Suggested Citation

  • Michaelowa, Katharina & Hefeker, Carsten, 2003. "Can Process Conditionality Enhance Aid Effectiveness? The Role of Bureaucratic Interest and Public Pressure," HWWA Discussion Papers 239, Hamburg Institute of International Economics (HWWA).
  • Handle: RePEc:zbw:hwwadp:26389

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    References listed on IDEAS

    1. Alesina, Alberto & Dollar, David, 2000. "Who Gives Foreign Aid to Whom and Why?," Journal of Economic Growth, Springer, vol. 5(1), pages 33-63, March.
    2. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
    3. Michaelowa, Katharina, 2003. "The Political Economy of the Enhanced HIPC-Initiative," Public Choice, Springer, vol. 114(3-4), pages 461-476, March.
    4. Diwan, I. & Rodrik, D., 1992. "External Debt, Adjustment, and Burden Sharing: A Unified Framework," Princeton Studies in International Economics 73, International Economics Section, Departement of Economics Princeton University,.
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    Cited by:

    1. Carsten Hefeker, 2006. "Project Aid or Budget Aid? The Interests of Governments and Financial Institutions," Review of Development Economics, Wiley Blackwell, vol. 10(2), pages 241-252, May.

    More about this item


    poverty reduction; process conditionality; political economy of international organizations;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations


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