Foreign Aid Delivery, Donor Selectivity, And Poverty: A Political Economy of Aid Effectiveness
Open Access
- Author:
- Dietrich, Simone
- Graduate Program:
- Political Science
- Degree:
- Doctor of Philosophy
- Document Type:
- Dissertation
- Date of Defense:
- February 28, 2011
- Committee Members:
- Douglas William Lemke, Dissertation Advisor/Co-Advisor
Douglas William Lemke, Committee Chair/Co-Chair
Christopher Jon Zorn, Committee Member
Joseph Wright, Committee Member
Michael Bernhard, Committee Member
Mark Sebastian Anner, Committee Member - Keywords:
- foreign aid
donor decision-making
poverty
institutions - Abstract:
- Under what conditions does aid improve general welfare? This dissertation provides an answer to this important question by examining the causal relationship between donor decision-making and outcomes. While the conventional study of aid e ffectiveness focuses on what happens to the aid in the recipient country, this study focuses on the role of donor governments. At the heart of the theory is the decision-calculus of donors whose goal is to maximize aid success in the recipient country. Specifi cally, I focus on donor decisions about how to deliver aid, and how these decisions aff ect poverty in the recipient country. Donors use diff erent tactics to deliver their bilateral assistance, including government-to-government and non-state development channels (e.g. NGOs, multilaterals, and private contractors). My central argument posits that donor expectations about the likelihood of aid capture in the recipient country induce systematic donor decisions about the selection of aid delivery mechanisms. What informs donor expectations about aid capture is the quality of recipient institutions. Badly governed institutions signal a high probability of aid capture, leading to low levels of donor confidence. In such environments, outcome-oriented donors will take actions to decrease their aid's sensitivity to aid capture ex ante by insulating the aid from government intervention. They bypass weak and corrupt government structures and channel the aid through alternative channels of development. By integrating the strengths and weaknesses of the recipient country's governance systems into the design of aid delivery mechanisms, donors are more likely to reduce poverty, as measured by infant health. I illustrate donor decision-making through interview evidence gathered from 22 face-to-face discussions with senior officials from major donor governments (U.S., France, United Kingdom, Germany) and their implementing agencies. I test my argument using quantitative methods. I fi nd that donors systematically condition delivery mechanisms on the quality of recipient governance, all else equal. I also show that the (endogenous) donor bypass decision reduces infant mortality in poorly governed countries.