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Fungibility and the Choice of Aid Modalities

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  • Stefan Leiderer

Abstract

The 'right' choice of instruments and modalities to provide aid to developing countries in support of poverty reduction and economic development is arguably the most contested issue in the current international debate on aid effectiveness. A particular controversy exists around the provision of aid in the form of budget support to avoid high transaction costs and other shortcomings of traditional project-based aid. Critics argue that this kind of 'programme aid' involves unacceptably high fiduciary risks due to the fungibility of budgetary funds.

Suggested Citation

  • Stefan Leiderer, 2012. "Fungibility and the Choice of Aid Modalities," WIDER Working Paper Series wp-2012-068, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2012-068
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    File URL: https://www.wider.unu.edu/sites/default/files/wp2012-068.pdf
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    Citations

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    Cited by:

    1. Eugenie W. H. Maïga, 2014. "Does Foreign Aid in Education Foster Gender Equality in Developing Countries?," WIDER Working Paper Series wp-2014-048, World Institute for Development Economic Research (UNU-WIDER).
    2. Cruzatti C., John & Dreher, Axel & Matzat, Johannes, 2023. "Chinese aid and health at the country and local level," World Development, Elsevier, vol. 167(C).
    3. Leiderer, Stefan, 2013. "Donor Coordination for Effective Government Policies? Implementation of the New Aid Effectiveness Agenda in Health and Education in Zambia," WIDER Working Paper Series 049, World Institute for Development Economic Research (UNU-WIDER).
    4. Lee, Melissa M. & Izama, Melina Platas, 2015. "Aid Externalities: Evidence from PEPFAR in Africa," World Development, Elsevier, vol. 67(C), pages 281-294.
    5. Łukasz Marć, 2017. "The Impact of Aid on Total Government Expenditures: New Evidence on Fungibility," Review of Development Economics, Wiley Blackwell, vol. 21(3), pages 627-663, August.
    6. Ron Duncan & Chris Banga, 2018. "Solutions to poor service delivery in Papua New Guinea," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 5(3), pages 495-507, September.
    7. Maiga, Eugenie W.H., 2014. "Does foreign aid in education foster gender equality in developing countries?," WIDER Working Paper Series 048, World Institute for Development Economic Research (UNU-WIDER).
    8. Martínez Álvarez, Melisa & Borghi, Josephine & Acharya, Arnab & Vassall, Anna, 2016. "Is Development Assistance for Health fungible? Findings from a mixed methods case study in Tanzania," Social Science & Medicine, Elsevier, vol. 159(C), pages 161-169.
    9. Rudolph, Alexandra, 2017. "The concept of SDG-sensitive development cooperation: implications for OECD-DAC members," IDOS Discussion Papers 1/2017, German Institute of Development and Sustainability (IDOS).
    10. Vallés-Giménez, Jaime & Zárate-Marco, Anabel, 2017. "Fungibility and bandwagon effects of capital transfers in a federal context," Economics Discussion Papers 2017-46, Kiel Institute for the World Economy (IfW Kiel).
    11. Patrick Legros & Mohamed Mounir Sraieb, 2015. "Money or Projects: How Should Altruistic Donors Give Aid ?," Working Papers ECARES ECARES 2015-18, ULB -- Universite Libre de Bruxelles.
    12. Łukasz Marć, 2015. "The impact of aid on total government expenditures: New evidence on fungibility," WIDER Working Paper Series wp-2015-010, World Institute for Development Economic Research (UNU-WIDER).
    13. Łukasz Marć, 2017. "The Impact of Aid on Total Government Expenditures: New Evidence on Fungibility," Review of Development Economics, Wiley Blackwell, vol. 21(3), pages 627-663, August.
    14. Svea Koch & Stefan Leiderer & Jörg Faust & Nadia Molenaers, 2017. "The rise and demise of European budget support: political economy of collective European Union donor action," Development Policy Review, Overseas Development Institute, vol. 35(4), pages 455-473, July.
    15. Stefan Leiderer, 2013. "Donor Coordination for Effective Government Policies?: Implementation of the New Aid Effectiveness Agenda in Health and Education in Zambia," WIDER Working Paper Series wp-2013-049, World Institute for Development Economic Research (UNU-WIDER).
    16. Mikami, Satoru & Furukawa, Mitsuaki, 2016. "Outsourced Technical Cooperation Reconsidered: Agency Problems in the Support of Decentralized Public Service Delivery in Sierra Leone," Working Papers 119, JICA Research Institute.

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