Donor Fragmentation and Bureaucratic Quality in Aid Recipients

32 Pages Posted: 20 Apr 2016

See all articles by Stephen Knack

Stephen Knack

World Bank - Development Research Group (DECRG)

Aminur Rahman

University College London

Date Written: January 2004

Abstract

This paper analyzes the impact of donor fragmentation on the quality of government bureaucracy in aid-recipient nations. A formal model of a donor's decision to hire government administrators to manage donor-funded projects predicts that the number of administrators hired declines as the donor's share of other projects in the country increases, and as the donor's altruism (concern for the success of other donors' projects) increases. These hypotheses are supported by cross-country empirical tests using an index of bureaucratic quality available for aid-recipient nations over the 1982-2001 period. Declines in bureaucratic quality are associated with higher donor fragmentation (reflecting the presence of many donors, each with a small share of aid), and with smaller shares of aid coming from multilateral agencies, a proxy for donor altruism.

This paper - a product of Public Services, Development Research Group - is part of a larger effort in the group to identify ways in which donors inadvertently undermine institutional development in aid recipient countries.

Suggested Citation

Knack, Stephen and Rahman, Aminur, Donor Fragmentation and Bureaucratic Quality in Aid Recipients (January 2004). Available at SSRN: https://ssrn.com/abstract=636606

Stephen Knack (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

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HOME PAGE: http://econ.worldbank.org/staff/sknack

Aminur Rahman

University College London ( email )

Gower Street
London
United Kingdom

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