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

UNU-WIDER discussion paper 01/2003

Posted: 20 Nov 2014

See all articles by Tony Addison

Tony Addison

United Nations University

Mark McGillivray

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

Matthew O. Odedokun

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

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Date Written: January 2003

Abstract

The paper reports an empirical study of the factors affecting burden sharing among OECD’s 22 DAC members in ‘bankrolling’ the multilateral aid agencies. These are the UN agencies, World Bank’s IDA and non-IDA programmes, regional development banks, European Community, and other multilateral agencies that include the Global Environmental Facility and the Montreal Protocol on environment. 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.

Suggested Citation

Addison, Tony and McGillivray, Mark and Odedokun, Matthew O., Donor Funding of Multilateral Aid Agencies: Determining Factors and Revealed Burden Sharing (January 2003). UNU-WIDER discussion paper 01/2003, Available at SSRN: https://ssrn.com/abstract=2528054

Tony Addison (Contact Author)

United Nations University ( email )

Katajanokanlaituri 6B
Helsinki, FIN-00160
Finland

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)

HOME PAGE: http://www.wider.unu.edu

Matthew O. Odedokun

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

Katajanokanlaituri 6B
Helsinki, FIN-00160
Finland
+358-9-61599211 (Phone)
+358-9-61599333 (Fax)

HOME PAGE: http://www.wider.unu.edu

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