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The quality of foreign aid : country selectivity or donors incentives?

Author

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  • Wane, Waly

Abstract

The author investigates the determinants of foreign aid quality. He shows that design effects are a crucial component of quality. He thus establishes that donors have an impact on the quality of the foreign assistance they provide. The author also shows both theoretically and empirically that the quality of aid is endogenous to the relationship between the donor agency and the recipient government. Highly capable and accountable governments accept only well-designed projects, whereas governments with low accountability may accept poor quality projects either because they are unable to assess the worth of the projects or they will benefit personally.

Suggested Citation

  • Wane, Waly, 2004. "The quality of foreign aid : country selectivity or donors incentives?," Policy Research Working Paper Series 3325, The World Bank.
    • Handle: RePEc:wbk:wbrwps:3325
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    References listed on IDEAS

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    Cited by:

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    2. Sharri Byron, 2012. "Examining Foreign Aid Fungibility in Small Open Economies," Open Economies Review, Springer, vol. 23(4), pages 675-712, September.
    3. Charles Kenny, 2008. "What is effective aid? How would donors allocate it?," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(2), pages 330-346.
    4. J. Vernon Henderson & Yong Suk Lee, 2015. "Organization of Disaster Aid Delivery: Spending Your Donations," Economic Development and Cultural Change, University of Chicago Press, vol. 63(4), pages 617-664.
    5. Denizer, Cevdet & Kaufmann, Daniel & Kraay, Aart, 2013. "Good countries or good projects? Macro and micro correlates of World Bank project performance," Journal of Development Economics, Elsevier, vol. 105(C), pages 288-302.
    6. Knack,Stephen & Parks,Bradley Christopher & Harutyunyan,Ani & DiLorenzo,Matthew, 2020. "How Does the World Bank Influence the Development Policy Priorities of Low-Income and Lower-Middle Income Countries ?," Policy Research Working Paper Series 9225, The World Bank.
    7. Simović Dragana, 2015. "Project Management in Development Aid Industry – Public vs. Private," Croatian International Relations Review, Sciendo, vol. 21(72), pages 167-197, February.
    8. Lodewijk Smets & Stephen Knack & Nadia Molenaers, 2013. "Political ideology, quality at entry and the success of economic reform programs," The Review of International Organizations, Springer, vol. 8(4), pages 447-476, December.
    9. Elisabeth Paul, 2006. "A Survey of the Theoretical Economic Literature on Foreign Aid," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 20(1), pages 1-17, May.
    10. Tierney, Michael J. & Nielson, Daniel L. & Hawkins, Darren G. & Roberts, J. Timmons & Findley, Michael G. & Powers, Ryan M. & Parks, Bradley & Wilson, Sven E. & Hicks, Robert L., 2011. "More Dollars than Sense: Refining Our Knowledge of Development Finance Using AidData," World Development, Elsevier, vol. 39(11), pages 1891-1906.
    11. Martin Ravallion, 2013. "Knowledgeable bankers? The demand for research in World Bank operations," Journal of Development Effectiveness, Taylor & Francis Journals, vol. 5(1), pages 1-29, March.
    12. Feeny, Simon & Vuong, Vu, 2017. "Explaining Aid Project and Program Success: Findings from Asian Development Bank Interventions," World Development, Elsevier, vol. 90(C), pages 329-343.
    13. Gunatilake, H. & Fabella, R.V & Lagman-Martin, A., 2011. "Foreign Aid, Aid Effectiveness and the New Aid Paradigm: A Review," Sri Lankan Journal of Agricultural Economics, Sri Lanka Agricultural Economics Association (SAEA), vol. 12, pages 1-44.
    14. Bandeira, Pablo, 2009. "El desarrollo institucional en el contexto de la ineficacia de la ayuda: ¿qué podemos hacer? [Promoting institutional development in the context of actual aid ineffectiveness: what can we do?]," MPRA Paper 13372, University Library of Munich, Germany.
    15. Martin Ravallion & Adam Wagstaff, 2012. "The World Bank’s publication record," The Review of International Organizations, Springer, vol. 7(4), pages 343-368, December.
    16. M. Rodwan Abouharb & Erick Duchesne, 2019. "Economic Development and the World Bank," Social Sciences, MDPI, vol. 8(5), pages 1-30, May.
    17. Moll, Peter & Geli, Patricia & Saavedra, Pablo, 2015. "Correlates of success in World Bank development policy lending," Policy Research Working Paper Series 7181, The World Bank.
    18. Burns, Sarah L. & Krott, Max & Sayadyan, Hovik & Giessen, Lukas, 2017. "The World Bank Improving Environmental and Natural Resource Policies: Power, Deregulation, and Privatization in (Post-Soviet) Armenia," World Development, Elsevier, vol. 92(C), pages 215-224.
    19. Liutang Gong & Yuzhe Zhang & Heng-fu Zou, 2008. "Foreign Aid, Public Spending, Optimal Fiscal and Monetary Policies, and Long-Run Growth," CEMA Working Papers 309, China Economics and Management Academy, Central University of Finance and Economics.
    20. Manabu Nose, 2014. "Micro Responses to Disaster Relief Aid: Design Problems for Aid Efficacy," Economic Development and Cultural Change, University of Chicago Press, vol. 62(4), pages 727-767.

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