The Trojan-Horse Principle in Development Assistance: A Reading of Ugandas Experience with Aid

14 Pages Posted: 20 Jan 2007

Abstract

The World Bank recommends ideas, not money as a guiding principle to donors for dealing with badly governed countries. This paper challenges that principle on the basis of a study of the evolution in Uganda of pro-growth policies in the early to mid 1990s and pro-poor policies in the late 1990s. The analysis of Uganda's experience with aid is accommodated within the theoretical framework of a principal-agent conditionality game, in which policy objectives of the recipient (the agent) evolve over time. The key finding of the paper is that the apparent conditionality failure of the period 1987-91 has paved the way for later reform. Financial aid given during this period suspended the necessity of reforms and bought donor proximity to recipient policy deliberations, as a result of both of which the policy learning could take place that led to later successful reform measures.

Suggested Citation

Verschoor, Arjan, The Trojan-Horse Principle in Development Assistance: A Reading of Ugandas Experience with Aid. Review of Development Economics, Vol. 11, No. 1, pp. 78-91, February 2007, Available at SSRN: https://ssrn.com/abstract=958420 or http://dx.doi.org/10.1111/j.1467-9361.2007.00365.x

Arjan Verschoor (Contact Author)

University of East Anglia (UEA) ( email )

Norwich Research Park
Norwich, Norfolk NR4 7TJ
United Kingdom

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