Political power and aid tying practices in the development assistance committee countries

This paper examines on a panel of 22 OECD Development Assistance Committee countries whether fragmentation of executive power and the degree of competition in the legislative branch of government increases the amount of tied aid over the 1979-2009 period. Fragmentation and competition are broadly defined as the degree to which the costs of a dollar of aid expenditure are internalized by decision makers and the relative strength of the government’s position vis-à-vis legislative composition respectively. The empirical results show tied aid, both in levels and as a percentage of total aid, increases as the number of decision makers within the government increases and decreases as the proportion of excess seats a governing coalition holds above a simple majority increases.