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Multilateral Aid Agencies and Strategic Donor Behaviour

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  • George Mavrotas
  • Espen Villanger

Abstract

The paper builds on recent empirical evidence on the importance of strategic donor behaviour in aid allocation in order to develop a theoretical model where donor pressure on a recipient for influencing the aid disbursement of a multilateral institution is endogenously determined. Our game-theoretic, multi-agent model with one aid recipient, two bilateral donors and one multilateral institution illustrates the advantage of putting pressure on the recipient as an instrument for foreign policy, as seen from the mighty donor's point of view.

Suggested Citation

  • George Mavrotas & Espen Villanger, 2006. "Multilateral Aid Agencies and Strategic Donor Behaviour," WIDER Working Paper Series DP2006-02, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:dp2006-02
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    File URL: https://www.wider.unu.edu/sites/default/files/dp2006-02.pdf
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    References listed on IDEAS

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    25. Tun Lin & George Mavrotas, 2004. "A Contract Perspective on the International Finance Facility," WIDER Working Paper Series RP2004-60, World Institute for Development Economic Research (UNU-WIDER).
    26. Kanbur, Ravi, 2006. "The economics of international aid," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 26, pages 1559-1588, Elsevier.
    27. White, Howard, 2004. "Trends in the volume and allocation of official flows from donor countries," International Review of Economics & Finance, Elsevier, vol. 13(3), pages 233-244.
    28. Jan-Erik Antipin & George Mavrotas, 2006. "On the Empirics of Aid and Growth: A Fresh Look," WIDER Working Paper Series RP2006-05, World Institute for Development Economic Research (UNU-WIDER).
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Gil S. Epstein & Ira N. Gang, 2009. "Poverty and Governance: The Contest for Aid," Review of Development Economics, Wiley Blackwell, vol. 13(3), pages 382-392, August.
    2. Kilby, Christopher, 2009. "The political economy of conditionality: An empirical analysis of World Bank loan disbursements," Journal of Development Economics, Elsevier, vol. 89(1), pages 51-61, May.
    3. Stijn Claessens & Danny Cassimon, 2007. "Empirical evidence on the new international aid architecture," WEF Working Papers 0026, ESRC World Economy and Finance Research Programme, Birkbeck, University of London.
    4. Amegashie, J. Atsu & Ouattara, Bazoumanna & Strobl, Eric, 2007. "Moral Hazard and the Composition of Transfers: Theory with an Application to Foreign Aid," MPRA Paper 3158, University Library of Munich, Germany, revised 06 May 2007.
    5. Gil S. Epstein & Ira N. Gang, 2006. "Decentralizing Aid with Interested Parties," WIDER Working Paper Series RP2006-06, World Institute for Development Economic Research (UNU-WIDER).
    6. George Mavrotas, 2011. "Security and Development: Delving Deeper into the Nexus," Chapters, in: George Mavrotas (ed.), Security and Development, chapter 1, Edward Elgar Publishing.
    7. Kurt Annen & Luc Moers, 2017. "Donor Competition for Aid Impact, and Aid Fragmentation," The World Bank Economic Review, World Bank, vol. 31(3), pages 708-729.
    8. Maria Perrotta Berlin & Raj M. Desai & Anders Olofsgård, 2023. "Trading favors? UN Security Council membership and subnational favoritism in aid recipients," The Review of International Organizations, Springer, vol. 18(2), pages 237-258, April.
    9. Paolo Pinotti & Riccardo Settimo, 2011. "Does aid buy votes?," Questioni di Economia e Finanza (Occasional Papers) 101, Bank of Italy, Economic Research and International Relations Area.
    10. Epstein, Gil S. & Gang, Ira N., 2009. "Good governance and good aid allocation," Journal of Development Economics, Elsevier, vol. 89(1), pages 12-18, May.
    11. Vera Z. Eichenauer & Simon Hug, 2018. "The politics of special purpose trust funds," Economics and Politics, Wiley Blackwell, vol. 30(2), pages 211-255, July.
    12. Alessia Isopi & George Mavrotas, 2006. "Aid Allocation and Aid Effectiveness: An Empirical Analysis," WIDER Working Paper Series RP2006-07, World Institute for Development Economic Research (UNU-WIDER).
    13. repec:bla:rdevec:v:13:y:2009:i:s1:p:382-392 is not listed on IDEAS
    14. Osman S Kiratli, 2019. "Aiding together? Europeans’ attitudes on common aid policy," European Union Politics, , vol. 20(2), pages 261-281, June.
    15. Raechelle Mascarenhas & Todd Sandler, 2006. "Do donors cooperatively fund foreign aid?," The Review of International Organizations, Springer, vol. 1(4), pages 337-357, December.
    16. Aidy Halimanjaya, 2016. "Allocating climate mitigation finance: a comparative analysis of five major green donors," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 6(3), pages 161-185, July.
    17. Kilby, Christopher, "undated". "The Political Economy of Conditionality: An Empirical Analysis of World Bank Enforcement," Vassar College Department of Economics Working Paper Series 92, Vassar College Department of Economics.

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