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On the Delegation of Aid Implementation to Multilateral Agencies

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dc.contributor.authorAnnen, Kurt
dc.contributor.authorKnack, Stephen
dc.date.accessioned2015-11-05T17:03:50Z
dc.date.available2015-11-05T17:03:50Z
dc.date.issued2015-10
dc.description.abstractSome multilateral agencies implement aid projects in a broad range of sectors, with aid disbursements showing a strong overlap with those of bilateral donors. The question then arises of why do bilateral donors delegate sizable shares of their aid to non-specialized agencies for implementation? This paper develops a game theoretic model to explain this puzzle. Donors delegate aid implementation to the multilateral agency (ML) to strengthen the policy selectivity of aid, incentivizing policy improvements in recipient countries, in turn improving aid’s development effectiveness. Bilateral donors are better off delegating aid to ML even when they are purely altruistic but disagree on how aid should be distributed across recipients. Key for our result to hold is that ML searches some middle ground among disagreeing donors. Aid selectivity—in terms of both policy and poverty—emerges endogenously and is credible, as it is the solution to ML’s optimization problem. Moreover, the model shows that if one sufficiently large donor is policy selective in its aid allocations, there is no need for other donors to be policy selective. The World Bank’s aid program for lower-income countries, the International Development Administration (IDA), is shown to fit the assumptions and predictions of the model. Specifically, IDA is a dominant donor in most of its recipient countries and is much more policy and poverty selective than bilateral aid. Donors view it as a public good, and contribution more to it when bilateral aid is less selective. Potential threats to IDA’s role as a dominant, policy-selective donor include the emergence of nontraditional donors, changes in voting shares, and traditional donors’ increasing use of earmarked contributions.en
dc.identifierhttp://documents.worldbank.org/curated/en/2015/10/25192585/delegation-aid-implementation-multilateral-agencies
dc.identifier.doi10.1596/1813-9450-7455
dc.identifier.urihttps://hdl.handle.net/10986/22870
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 7455
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectDEVELOPMENT RESEARCH
dc.subjectCOMPETITORS
dc.subjectLEAD
dc.subjectECONOMIC GROWTH
dc.subjectHUMANITARIAN AID
dc.subjectDEVELOPMENT ASSISTANCE
dc.subjectMINERAL RESOURCES
dc.subjectDONOR
dc.subjectPARTICIPATION
dc.subjectAID ALLOCATION
dc.subjectDEVELOPMENT BANKS
dc.subjectDEVELOPMENT ISSUES
dc.subjectHEALTH
dc.subjectDOMESTIC RESOURCES
dc.subjectLOAN
dc.subjectDEVELOPMENT AID
dc.subjectPROJECTS
dc.subjectPRIORITIES
dc.subjectMULTILATERAL DEVELOPMENT BANKS
dc.subjectPM
dc.subjectPUBLIC HEALTH
dc.subjectDEVELOPED COUNTRIES
dc.subjectSHAREHOLDERS
dc.subjectFASHION
dc.subjectDEVELOPMENT
dc.subjectBIASES
dc.subjectTICS
dc.subjectAID
dc.subjectDISEASE
dc.subjectAID CONDITIONALITY
dc.subjectEDUCATION
dc.subjectCOLLUSION
dc.subjectBILATERAL DONORS
dc.subjectLEADS
dc.subjectEQUALITY
dc.subjectDIS
dc.subjectBILATERAL AID
dc.subjectDONORS
dc.subjectWATER
dc.subjectLENDING
dc.subjectSOCIETY
dc.subjectMARKETS
dc.subjectNEEDS
dc.subjectDEVELOPMENT AGENCIES
dc.subjectINTERNATIONAL DEVELOPMENT
dc.subjectACCESS
dc.subjectINCLUSION
dc.subjectMIDDLE-INCOME COUNTRIES
dc.subjectTUBERCULOSIS
dc.subjectLOANS
dc.subjectAIDS
dc.subjectSEE
dc.subjectDEVELOPMENT ADMINISTRATION
dc.subjectCOOPERATIVE
dc.subjectFOOD AID
dc.subjectINDUSTRIAL COUNTRIES
dc.subjectFISHING
dc.subjectGRANTS
dc.subjectDEVELOPMENT POLICY
dc.subjectBILATERAL DONOR
dc.titleOn the Delegation of Aid Implementation to Multilateral Agenciesen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleOn the Delegation of Aid Implementation to Multilateral Agencies
okr.date.disclosure2015-10-22
okr.date.doiregistration2025-04-10T12:00:09.172878Z
okr.doctypePublications & Research::Policy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2015/10/25192585/delegation-aid-implementation-multilateral-agencies
okr.guid422741467998819456
okr.identifier.doi10.1596/1813-9450-7455
okr.identifier.externaldocumentum090224b0831634b8_1_0
okr.identifier.internaldocumentum25192585
okr.identifier.reportWPS7455
okr.importedtrue
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2015/10/22/090224b0831634b8/1_0/Rendered/PDF/On0the0delegat0ultilateral0agencies.pdfen
okr.topicMacroeconomics and Economic Growth::Development Economics & Aid Effectiveness
okr.unitHuman Development and Public Services Team, Development Research Group
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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