Donor Funding of Multilateral Aid Agencies: Determining Factors and Revealed Burden Sharing

World Economy, 27(2):173-191. (2004) DOI: 10.1111/j.1467-9701.2004.00595.x

Posted: 28 Oct 2014

See all articles by Tony Addison

Tony Addison

United Nations University

Mark McGillivray

United Nations - World Institute for Development Economics Research (UNU/WIDER)

Multiple version iconThere are 3 versions of this paper

Date Written: January 2004

Abstract

This paper reports an empirical study of the factors affecting burden sharing among OECD's 22 DAC members in 'bankrolling' the multilateral aid agencies. Annual data over 1970-2000, pooled across the donor countries, form the basis for the empirical estimation of each donor's share in the ODA aid receipts for each multilateral agency. Our findings suggest the existence of reverse exploitation, i.e., the financial burden of the agencies is disproportionally carried by the smaller donors. The study also finds that factors such as inherent donor generosity, donor concern for domestic egalitarianism, and the extent to which donors are pro-poor in their bilateral aid policies have an impact on their readiness to support multilateral agencies financially. Size of the donor government and its budgetary balance positively influence burden sharing of contributions to other multilateral agencies. But neither the phase of economic cycle nor the rate of economic growth affects the burden-sharing responsibility of donors. It was also observed that contributions by EU members to the EC do not appear to crowd-out their contributions to other multilateral aid agencies and that right-wing donor governments are generally more parsimonious with regard to financial assistance to multilateral aid agencies. The preferred alternative, particularly among EU member countries, appears to be the EC.

Note: Copyright Blackwell Publishing Ltd 2004.

Suggested Citation

Addison, Tony and McGillivray, Mark, Donor Funding of Multilateral Aid Agencies: Determining Factors and Revealed Burden Sharing (January 2004). World Economy, 27(2):173-191. (2004) DOI: 10.1111/j.1467-9701.2004.00595.x , Available at SSRN: https://ssrn.com/abstract=2515256

Tony Addison (Contact Author)

United Nations University ( email )

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Mark McGillivray

United Nations - World Institute for Development Economics Research (UNU/WIDER) ( email )

Katajanokanlaituri 6B
Helsinki, FIN-00160
Finland
+358-9-61599213 (Phone)
+358-9-61599333 (Fax)

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