Hostname: page-component-745bb68f8f-lrblm Total loading time: 0 Render date: 2025-01-28T23:03:08.029Z Has data issue: false hasContentIssue false
  • English
  • Français

Donor Political Economies and the Pursuit of Aid Effectiveness

Published online by Cambridge University Press:  13 November 2015

Simone Dietrich
Get access

Abstract

In response to corruption and inefficient state institutions in recipient countries, some foreign aid donors outsource the delivery of aid to nonstate development actors. Other donor governments continue to support state management of aid, seeking to strengthen recipient states. These cross-donor differences can be attributed in large measure to different national orientations about the appropriate role of the state in public service delivery. Countries that place a high premium on market efficiency (for example, the United States, United Kingdom, Sweden) will outsource aid delivery in poorly governed recipient countries to improve the likelihood that aid reaches the intended beneficiaries of services. In contrast, states whose political economies emphasize a strong state in service provision (for example, France, Germany, Japan) continue to support state provision. This argument is borne out by a variety of tests, including statistical analysis of dyadic time-series cross-section aid allocation data and individual-level survey data on a cross-national sample of senior foreign aid officials. To understand different aid policies, one needs to understand the political economies of donors.

Type
Research Article
Information
International Organization , Volume 70 , Issue 1 , Winter 2016 , pp. 65 - 102
Copyright
Copyright © The IO Foundation 2016 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Acht, Martin, Mahmoud, Toman Omar, and Thiele, Rainer. 2015. Corrupt Governments Do Not Receive More State-to-State Aid: Governance and the Delivery of Foreign Aid Through Non-State Actors. Journal of Development Economics 114:20–33.CrossRefGoogle Scholar
Andersen, Torben M., Holmstrom, Bengt, Honkapohja, Seppo, Korkman, Sixten, Soderstrom, Hans Tson, and Vartiainen, Juhana. 2007. The Nordic Model: Embracing Globalization and Sharing Risks. Helsinki: Taloustieto Oy.Google Scholar
Ansell, Ben. 2010. From the Ballot to the Blackboard: The Redistributive Political Economy of Education. Cambridge, UK: Cambridge University Press.Google Scholar
Arel-Bundock, Vincent, Atkinson, James, and Potter, Rachel Augustine. 2015. The Limits of Foreign Aid Diplomacy: How Bureaucratic Design Shapes Aid Distribution. International Studies Quarterly 59(3): 544–56.Google Scholar
Ashburner, Lynn, Fitzgerald, Louise, and Pettigrew, Andrew M.. 1996. New Public Management in Action. Oxford, UK: Oxford University Press.Google Scholar
Bennett, Scott D., and Stam, Allan C.. 2000. EUGene: A Conceptual Manual. International Interactions 26 (2):179–204.Google Scholar
Bermeo, Sarah. 2009. Donors and Development: Sector Allocation in Foreign Aid. Unpublished manuscript, Yale University, New Haven, CT.Google Scholar
Bertelli, Anthony M. 2012. The Political Economy of Public Sector Governance. Cambridge, UK: Cambridge University Press.CrossRefGoogle Scholar
Bertoli, Simone, Cornia, Giovanni, and Manaresi, Francesco. 2008. Aid Effort and Its Determinants: A Comparison of the Italian Performance with Other OECD Donors. Working Paper 11. Florence: Universita Degli Studi Firenze.Google Scholar
Bjerninger, Jan. 2013. Det framgngsrika bistndet: Om svenskt utvecklingssamarbete i praktiken. Stockholm: Vulkan.Google Scholar
Bold, Tessa, Kimenyi, Mwangi, Mwabu, Germano, Ng'ang'a, Alice, and Sandefur, Justin. 2013. Scaling-up What Works: Experimental Evidence on External Validity in Kenyan Education. Working Paper 321. Washington, DC: Center for Global Development.Google Scholar
Boutton, Andrew T., and Carter, David B.. 2014. Fair Weather Allies? Terrorism and the Allocation of US Foreign Aid. Journal of Conflict Resolution 58 (7):1144–73.CrossRefGoogle Scholar
Brech, Viktor, and Potrafke, Niklas. 2014. Donor Ideology and Types of Foreign Aid, Journal of Comparative Economics 42 (1):61–75.Google Scholar
Breuning, Marijke. 1995. Words and Deeds: Foreign Assistance Rhetoric and Policy Behavior in the Netherlands, Belgium, and the United Kingdom. International Studies Quarterly 39 (2):235–54.CrossRefGoogle Scholar
Bueno de Mesquita, Bruce, and Smith, Alastair. 2009. A Political Economy of Aid. International Organization 63 (2):309–40.Google Scholar
Chong, Alberto, and Gradstein, Mark. 2008. What Determines Foreign Aid? The Donors’ Perspective. Journal of Development Economics 87 (1):1–13.CrossRefGoogle Scholar
Christensen, Tom, and Laegreid, Per, eds. 2007. Transcending New Public Management: The Transformation of Public Sector Reforms. Burlington, VT: Ashgate.Google Scholar
Cohen, Gary B., Ansell, Ben W., Cox, Robert H., and Gingrich, Jane, eds. 2012. Social Policy in the Smaller European States. Oxford, UK: Berghan Books.Google Scholar
Conservative Party. 2009. One World Conservatism: A Conservative Agenda for International Development. Policy Green Paper 11. Available at <https://www.conservatives.com/~/media/Files/Green%20Papers/OneWorldConservatism.ashx?dl=true>. Accessed 3 May 2012..+Accessed+3+May+2012.>Google Scholar
Dietrich, Simone. 2013. Bypass or Engage? Explaining Donor Delivery Tactics in Foreign Aid Allocation. International Studies Quarterly 57 (4):679–712.Google Scholar
Dietrich, Simone, and Murdie, Amanda. 2015. Human Rights Shaming Through INGOs and Foreign Aid Delivery. Unpublished manuscript. Available at http://ssrn.com/abstract=2641766. Accessed 30 August 2015.Google Scholar
Dietrich, Simone, and Wright, Joseph. 2015. Foreign Aid Delivery Tactics and Democratic Change in Africa. Journal of Politics 77(1):216–34.CrossRefGoogle Scholar
Drezner, Daniel W. 2000. Ideas, Bureaucratic Politics, and the Crafting of Foreign Policy. American Journal of Political Science 44 (4):733–49.Google Scholar
Duflo, Esther, Dupas, Pascaline, and Kremer, Michael. 2012. School Governance, Teacher Incentives, and Pupil-Teacher Ratios: Experimental Evidence from Kenyan Primary Schools. Working Paper 17939. Cambridge, MA: National Bureau of Economic Research.Google Scholar
Easterly, William, and Pfütze, Tobias. 2008. Where Does the Money Go? Best and Worst Practices in Foreign Aid. Journal of Economic Perspectives 22 (2):29–52.Google Scholar
EM-DAT. 2013. International Disaster Database. Available at <www.emdat.be>. Accessed 2 May 2013..+Accessed+2+May+2013.>Google Scholar
Estevez-Abe, Margarita, Iversen, Torben, and Soskice, David. 2001. Social Protection and the Formation of Skills: A Reinterpretation of the Welfare State. In Varieties of Capitalism: The Institutional Foundations of Comparative Advantage, edited by Hall, Peter and Soskice, David, 145–83. Oxford, UK: Oxford University Press.CrossRefGoogle Scholar
Evans, Peter. 1995. Embedded Autonomy. States and Industrial Transformation. Princeton, NJ: Princeton University Press.CrossRefGoogle Scholar
Ferlie, Ewan, Ashburner, Lynn, Fitzgerald, Louise, and Pettigrew, Andrew. 1996. The New Public Management in Action. Oxford, UK: Oxford University Press.CrossRefGoogle Scholar
Flores, Thomas E., and Nooruddin, Irfan. 2009. Democracy Under the Gun: Understanding Post-Conflict Economic Recovery. Journal of Conflict Resolution 53 (1):3–29.CrossRefGoogle Scholar
Flores, Thomas E., and Nooruddin, Irfan. 2012. The Effect of Elections on Postconflict Peace and Reconstruction. Journal of Politics 74 (2):558–70.Google Scholar
Franzese, Robert J. 2002. Macroeconomic Policies of Developed Democracies. Cambridge, UK: Cambridge University Press.CrossRefGoogle Scholar
Freedom House. 2012. Freedom in the World. https://freedomhouse.org/report-types/freedom-world, accessed 3 April 2013.Google Scholar
Frot, Emmanuel. 2009. Aid and the Financial Crisis: Shall We Expect Development Aid to Fall? Unpublished manuscript, Stockholm Institute of Transition Economies.CrossRefGoogle Scholar
Fuchs, Andreas, Dreher, Axel, and Nunnenkamp, Peter. 2014. Determinants of Donor Generosity: A Survey of the Aid Budget Literature. World Development 56:172–99.CrossRefGoogle Scholar
Gingrich, Jane. 2011. Making Markets in the Welfare State: The Politics of Varying Market Reforms. Cambridge, UK: Cambridge University Press.CrossRefGoogle Scholar
Gleditsch, Nils Petter, Wallensteen, Peter, Eriksson, Mikael, Sollenberg, Margareta, and Strand, Havard. 2002. Armed Conflict 1946–2001: A New Dataset. Journal of Peace Research 39 (5):615–37.CrossRefGoogle Scholar
Goldstein, Judith, and Keohane, Robert. 1993. Ideas and Foreign Policy: Beliefs, Institutions, and Political Change. Ithaca, NY: Cornell University Press.Google Scholar
Gourevitch, Peter A. 1986. Politics in Hard Times: Comparative Responses to International Economic Crises. Ithaca, NY: Cornell University Press.Google Scholar
Green, Donald, Kim, Soo Yeon, and Yoon, David. 2001. Dirty Pool. International Organization 55 (2):441–68.CrossRefGoogle Scholar
Hall, Peter, and Gingerich, Daniel. 2009. Varieties of Capitalism and Institutional Complementarities in the Political Economy. British Journal of Political Science 39 (3):449–82.Google Scholar
Hall, Peter, and Soskice, David, eds. 2001. Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. Oxford, UK: Oxford University Press.Google Scholar
Hefeker, Carsten, and Michaelowa, Katharina. 2005. Can Process Conditionality Enhance Aid Effectiveness? The Role of Bureaucratic Interests and Public Pressure. Public Choice 122 (1/2):159–75.Google Scholar
International Monetary Fund (IMF). 2011. Direction of Trade Statistics. Available at <http://elibrary-data.imf.org/QueryBuilder.aspx?key=19784661&s=322>. Accessed 1 December 2009..+Accessed+1+December+2009.>Google Scholar
Jablonski, Ryan. 2014. How Aid Target Votes: The Effect of Electoral Strategies on the Distribution of Foreign Aid. World Politics 66 (2):293–330.Google Scholar
Katzenstein, Peter J. 1978. Between Power and Plenty: Foreign Economic Policies of Advanced Industrialized States. Madison: University of Wisconsin Press.Google Scholar
Katzenstein, Peter J. 1985. Small States in World Markets: Industrial Policy in Europe. Ithaca, NY: Cornell University Press.Google Scholar
Kaufman, Daniel, Kraay, Aart, and Mastruzzi, Massimo. 2011. Governance Matters VI. Available at <http://info.worldbank.org/governance/wgi/index.aspx#home>. Accessed 9 January 2012..+Accessed+9+January+2012.>Google Scholar
Kilby, Christopher. 2011. What Determines the Size of Aid Projects? World Development 39 (11):1981–94.Google Scholar
Knack, Stephen. 2013. Proliferation of Earmarked Contributions to Multilateral Donors. Unpublished manuscript, World Bank, Washington, DC.Google Scholar
Kono, Daniel Y., and Montinola, Gabriella R.. 2009. Does Foreign Aid Support Autocrats, Democrats, or Both? Journal of Politics 71 (2):704–18.Google Scholar
Kuziemko, Ilyana, and Werker, Eric. 2006. How Much Is a Seat on the Security Council Worth? Foreign Aid and Bribery at the United Nations. Journal of Political Economy 114 (5):905–30.Google Scholar
Lake, David A. 2009. Open Economy Politics: A Critical Review. Review of International Organizations 4 (3):219–44.Google Scholar
Lake, David A. 2013. Crises of Authority: Domestic Structures and the Changing American Imperium. Unpublished manuscript, University of California San Diego.Google Scholar
Lancaster, Carol. 2006. Foreign Aid: Diplomacy, Development, Domestic Politics. Chicago: University of Chicago Press.Google Scholar
Lumsdaine, David H. 1993. Moral Vision in International Politics: The Foreign Aid Regime, 1949–1989. Princeton, NJ: Princeton University Press.Google Scholar
Lundsgaard, Jens. 2002. Competition and Efficiency in Publicly Funded Services. OECD Economic Studies 35:79–128.Google Scholar
Lundsgaarde, Erik. 2012. The Domestic Politics of Foreign Aid. New York: Routledge.Google Scholar
Mansfield, Edward, and Pevehouse, Jon. 2006. Democratization and International Organizations. International Organization 60 (1):137–67.CrossRefGoogle Scholar
Metcalf, Les, and Richards, Sue. 1990. Improving Public Management. London: Sage.Google Scholar
Milner, Helen. 1997. Interests, Institutions, and Information: Domestic Politics and International Relations. Princeton, NJ: Princeton University Press.Google Scholar
Milner, Helen. 2006. Why Multilateralism? Foreign Aid and Domestic Principal-Agent Problems. In Delegation and Agency in International Organizations, edited by Hawkins, Darren, Lake, David, Nielson, Daniel, and Tierney, Michael, 107–39. Cambridge, UK: Cambridge University Press.Google Scholar
Milner, Helen, and Tingley, Dustin H.. 2010. The Political Economy of US Foreign Aid: American Legislators and the Domestic Politics of Aid. Economics and Politics 22 (2):200–32.Google Scholar
Milner, Helen, and Tingley, Dustin H.. 2011. Who Supports Global Economic Engagement? The Sources of Preferences in American Foreign Economic Policy. International Organization 65 (1):37–68.Google Scholar
Milner, Helen, and Tingley, Dustin H.. 2014. Sailing the Water's Edge: Where Domestic Politics Meets American Foreign Policy. Unpublished manuscript, Princeton University, Princeton, NJ.Google Scholar
Natsios, Andrew. 2010. The Clash of the Counter-bureaucracy and Development. Center for Global Development. Available at <www.cgdev.org/content/publications/detail/1424271>. Accessed 29 July 2012..+Accessed+29+July+2012.>Google Scholar
Nelson, Stephen C. 2014. Playing Favorites: How Shared Beliefs Shape the IMF's Lending Decisions. International Organization 68 (2):297–328.Google Scholar
Oden, Bertil, and Wohlgemuth, Lennart. 2013. Swedish Development Cooperation Policy in International Perspective. Perspectives 24. Gothenburg, Sweden: University of Gothenburg.Google Scholar
Organisation for Economic Cooperation and Development (OECD). 2011. National Accounts Database. Available at <http://stats.oecd.org/Index.aspx?DataSetCode=NAAG>. Accessed 14 March 2013..+Accessed+14+March+2013.>Google Scholar
Organisation for Economic Cooperation and Development (OECD). 2012. Development Database on Aid Activities: CRS. Available at <http://www.oecd-ilibrary.org/development/data/creditor-reporting-system_dev-cred-data-en>. Accessed 14 January 2012..+Accessed+14+January+2012.>Google Scholar
Osborne, David, and Gaebler, Ted. 1992. Reinventing Government. New York: Penguin.Google Scholar
Paxton, Pamela, and Knack, Stephen. 2012. Individual and Country-level Factors Affecting Support for Foreign Aid. International Political Science Review 33 (2):171–92.Google Scholar
Peterson, Paul. 1994. The President's Dominance in Foreign Policy Making. Political Science Quarterly 109 (2):215–34.Google Scholar
Quinn, Dennis P., and Inclan, Carla. 1997. The Origins of Financial Openness: A Study of Current and Capital Account Liberalization. American Journal of Political Science 41 (3):771–813.Google Scholar
Radelet, Steven. 2004. Aid Effectiveness and the Millennium Development Goals. Working Paper 39. Washington, DC: Center for Global Development.Google Scholar
Round, Jeffery I., and Odedokun, Matthew. 2004. Aid Effort and Its Determinants. International Review of Economics and Finance 13 (3):293–309.CrossRefGoogle Scholar
Simmons, Beth A. 1994. Who Adjusts: Domestic Sources of Foreign Economic Policy During the Interwar Years. Princeton, NJ: Princeton University Press.Google Scholar
Steinmo, Sven. 2010. The Evolution of Modern States: Sweden, Japan, and the United States. Cambridge, UK: Cambridge University Press.Google Scholar
Steinwand, Martin. 2015. Compete or Coordinate? Aid Fragmentation and Lead Donorship. International Organization 69 (2):443–72.Google Scholar
Suleiman, Ezra. 1974. Politics, Power, and Bureaucracy in France: The Administrative Elite. Princeton, NJ: Princeton University Press.Google Scholar
Suleiman, Ezra. 2003. Dismantling Democratic States. Princeton, NJ: Princeton University Press.Google Scholar
Sullivan, Terry. 1991. A Matter of Fact: The Two Presidencies Thesis Revitalized. In The Two Presidencies: A Quarter Century Assessment, edited by Shull, Steven A., 143–57. Chicago: Nelson-Hall.Google Scholar
Svensson, Jakob. 2000. Foreign Aid and Rent-Seeking. Journal of International Economics 51 (2):437–61.Google Scholar
Tanzi, Vito. 2011. Government Versus Markets: The Changing Role of the State. Cambridge, UK: Cambridge University Press.Google Scholar
Therien, Jean-Phillippe, and Noel, Alain. 2000. Political Parties and Foreign Aid. American Political Science Review 94 (1):151–62.CrossRefGoogle Scholar
Tingley, Dustin. 2010. Donors and Domestic Politics: Political Influences on Foreign Aid Effort. Quarterly Review of Economics and Finance 50 (1):40–49.Google Scholar
Union of International Associations. 2012. Yearbook of International Organizations. Available at <http://www.uia.org/yearbook>. Accessed 3 May 2012..+Accessed+3+May+2012.>Google Scholar
US Office of Management and Budget. 1993. Government Performance Results Act of 1993. Washington, DC. Available at http://www.whitehouse.gov/omb/mgmt-gpra/gplaw2m>. Accessed 6 February 2013..+Accessed+6+February+2013.>Google Scholar
U.S. Office of Management and Budget. 2011. Government Performance and Results Modernization Act of 2010. Washington, DC. Available at http://www.whitehouse.gov/omb/performance/gprm-act>. Accessed 6 February 2013..+Accessed+6+February+2013.>Google Scholar
Van der Veen, A. Maurits. 2011. Ideas, Interests, and Foreign Aid. Cambridge, UK: Cambridge University Press.Google Scholar
Volkov, Boris B., and Baron, Michelle E., eds. 2011. Internal Evaluation in the Twenty-first Century: New Directions for Evaluation. New York: Wiley and Sons.Google Scholar
Vreeland, James R., and Dreher, Axel. 2014. The Political Economy of the United Nations Security Council. Cambridge, UK: Cambridge University Press.CrossRefGoogle Scholar
Wildavsky, Aaron. 1966. The Two Presidencies. Trans-Action 4 (2):7–14.Google Scholar
Wildavsky, Aaron. 1998. The Two Presidencies. Society 35 (2):23–31.Google Scholar
Winters, Matthew. 2010. Choosing to Target: What Types of Countries Get Different Types of World Bank Projects? World Politics 62 (3):422–58.Google Scholar
Winters, Matthew. 2012. The Obstacles to Foreign Aid Harmonization: Lessons from Decentralization Support in Indonesia. Studies in Comparative International Development 47 (3):316–41.Google Scholar
Winters, Matthew. 2014. Targeted Aid and Capture in World Bank Projects. International Studies Quarterly 58 (2):31–42.Google Scholar
Wooldridge, Jeffrey. 2002. Econometric Analysis of Cross Section and Panel Data. Cambridge, UK: MIT Press.Google Scholar
World Bank. 2011. World Development Indicators. Washington, DC: World Bank. http://data.worldbank.org/indicator Accessed 3 December 2011.Google Scholar
Supplementary material: PDF

Dietrich supplementary material

Appendix

Download Dietrich supplementary material(PDF)
PDF 81 KB
Supplementary material: File

Dietrich supplementary material

Replication files

Download Dietrich supplementary material(File)
File 2.5 MB