Working Paper

Which Donors, Which Funds? : The Choice of Multilateral Funds by Bilateral Donors at the World Bank

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collection.link.5
https://openknowledge.worldbank.org/handle/10986/9
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Policy Research Working Papers
dc.contributor.author
Reinsberg, Bernhard
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Michaelowa, Katharina
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dc.contributor.author
Knack, Stephen
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dc.date.accessioned
2015-11-05T18:54:20Z
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dc.date.available
2015-11-05T18:54:20Z
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dc.date.issued
2015-10
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dc.description.abstract
The rapid growth of trust funds at multilateral development organizations has been widely neglected in the academic literature so far. Using a simple illustrative model, this paper examines the choice by sovereign donors among various trust fund options. The authors contend that the choice among the different trust funds involves a fundamental trade-off: larger funds provide donors with the benefit of burden sharing. Conversely, each donor can better assert its individual preferences in a fund with fewer other donors. The theoretical considerations yield testable implications on a range of factors affecting this fundamental tradeoff, most notably the area of intervention of the trust fund and competing domestic interests of donor countries. Using a sample of World Bank trust funds, the paper examines the participation decisions of Organisation for Economic Co-operation and Development/Development Assistance Committee donors over the past decade. In line with the theoretical argument, preference homogeneity among donors as well as indicators for global activities and fragile states assistance are robust determinants of participation in (large) multi-donor funds. In contrast, donors tend to prefer single-donor trust funds in areas in which their national interests dominate. Although they could use bilateral aid for the same purpose, they often prefer to channel their contributions through trust funds at multilateral agencies. Donors thereby reduce their own administrative costs, while benefiting from the expertise of the multilateral agency. These findings confirm prior qualitative case studies and evidence from donor reports, suggesting that reduced reliance on single-donor trust funds—a costly instrument from the perspective of multilateral agencies—can improve the development effectiveness of aid.
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dc.identifier.uri
http://hdl.handle.net/10986/22872
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dc.language
English
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dc.language.iso
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dc.publisher
World Bank, Washington, DC
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dc.relation.ispartofseries
Policy Research Working Paper;No. 7441
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dc.rights
CC BY 3.0 IGO
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dc.rights.holder
World Bank
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dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo/
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dc.subject
LIMITED
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dc.subject
TERRORISM
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dc.subject
EMPLOYMENT
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BILATERAL AGENCIES
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dc.subject
MULTILATERAL AID
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dc.subject
ACCOUNTING
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dc.subject
DEVELOPMENT ASSISTANCE
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dc.subject
DONOR
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dc.subject
INTEREST
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dc.subject
PRIVATIZATION
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dc.subject
AID FINANCING
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dc.subject
NATIONS
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dc.subject
STRATEGIES
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dc.subject
SERVICES
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dc.subject
PUBLIC SERVICES
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dc.subject
PORTFOLIO
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dc.subject
HEALTH
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dc.subject
PROJECTS
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dc.subject
MULTILATERAL DEVELOPMENT BANKS
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dc.subject
VOLUNTARY CONTRIBUTIONS
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dc.subject
ASSOCIATIONS
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dc.subject
NEGOTIATION
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dc.subject
PARTNER COUNTRIES
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dc.subject
CONFLICT
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dc.subject
INTERNATIONAL BANK
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dc.subject
GOVERNANCE ARRANGEMENTS
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dc.subject
EXPERT
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dc.subject
CONSTRAINT
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dc.subject
STATES
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dc.subject
AID
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dc.subject
TECHNICAL ASSISTANCE
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dc.subject
DISEASES
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dc.subject
LEADS
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dc.subject
PARTNERSHIPS
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dc.subject
FOREIGN AID
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dc.subject
UNION
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dc.subject
AGREEMENTS
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dc.subject
RESOURCE MOBILIZATION
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dc.subject
FOREIGN POLICIES
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dc.subject
WORLD DEVELOPMENT
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dc.subject
TRUST
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dc.subject
ORGANIZATIONS
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dc.subject
INTERNATIONAL DEVELOPMENT
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dc.subject
MIDDLE-INCOME COUNTRIES
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dc.subject
DIVERGENCES
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dc.subject
MIC
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dc.subject
TRUST FUNDS
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dc.subject
FINANCE
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ADMINISTRATIVE COSTS
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dc.subject
DIRECTORS
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dc.subject
ALLOCATION DECISIONS
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dc.subject
MICS
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dc.subject
BANKS
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dc.subject
UNDP
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dc.subject
DONOR COUNTRIES
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dc.subject
PROBABILITY MODELS
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dc.subject
IMF
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dc.subject
LEAD
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dc.subject
FOOD SECURITY
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dc.subject
ACCOUNTABILITY
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dc.subject
CLIMATE CHANGE
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dc.subject
MEMBER STATES
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dc.subject
INTERNATIONAL AFFAIRS
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dc.subject
INTERNATIONAL TRADE
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dc.subject
FOUNDATIONS
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dc.subject
COMPROMISE
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dc.subject
VALUE
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dc.subject
DEVELOPMENT BANKS
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dc.subject
BANK
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dc.subject
PARTNERSHIP
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dc.subject
AID INSTITUTIONS
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dc.subject
ECONOMY
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dc.subject
TACTICS
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dc.subject
NATION
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dc.subject
TRANSACTION COSTS
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MIDDLE-INCOME COUNTRY
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dc.subject
INTERNATIONAL COMMUNITY
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INTERNATIONAL STUDIES
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IFC
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GOVERNANCE
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dc.subject
TAXATION
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dc.subject
STATE
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WAR
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dc.subject
INVESTMENT
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dc.subject
BILATERAL DONORS
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RISK
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ORGANIZATION
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BILATERAL AID
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dc.subject
DONORS
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MULTILATERAL AGENCIES
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dc.subject
INTERNATIONAL NEGOTIATION
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dc.subject
UNIVERSITY
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dc.subject
DEVELOPED COUNTRY
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dc.subject
LENDING
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dc.subject
SOCIETY
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dc.subject
FOREIGN POLICY
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dc.subject
CONFLICT RESOLUTION
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dc.subject
GOVERNMENTS
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dc.subject
AIDS
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dc.subject
UNITED NATIONS SYSTEM
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dc.subject
HEALTH SERVICES
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PEACE
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RECONSTRUCTION
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dc.subject
ECONOMIES
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BILATERAL DONOR
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DONOR COUNTRY
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dc.title
Which Donors, Which Funds?
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dc.title.subtitle
The Choice of Multilateral Funds by Bilateral Donors at the World Bank
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dc.type
Working Paper
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okr.date.disclosure
2015-10-14
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okr.doctype
Publications & Research :: Policy Research Working Paper
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okr.doctype
Publications & Research
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okr.docurl
http://documents.worldbank.org/curated/en/2015/10/25155022/donors-funds-choice-multilateral-funds-bilateral-donors-world-bank
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okr.googlescholar.linkpresent
yes
okr.identifier.doi
10.1596/1813-9450-7441
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okr.identifier.externaldocumentum
090224b083145961_1_0
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okr.identifier.internaldocumentum
25155022
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okr.identifier.report
WPS7441
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okr.imported
true
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okr.pdfurl
http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2015/10/14/090224b083145961/1_0/Rendered/PDF/Which0donors000rs0at0the0World0Bank.pdf
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okr.topic
Finance and Financial Sector Development
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okr.topic
Macroeconomics and Economic Growth :: Development Economics & Aid Effectiveness
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okr.unit
Human Development and Public Services Team, Development Research Group
en_US

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