Multilateral Intermediation of Foreign Aid: What is the Trade-Off for Donor Countries?
By Matteo Bobba, Andrew J. Powell. 2006
123 citations recorded by the source corpus.
Why would bilateral donors intermediate aid through a multilateral and not extend aid directly? This paper suggests a trade-off: multiple bilateral donors for each recipient may imply coordination and strategic problems but intermediating through a multilateral may dilute individual donor objectives. The paper conducts traditional panel and truly bilateral regressions with bilateral-pair, fixed effects to model aid allocation decisions. The results confirm that politics is important for bilateral donors but also that aid fragmentation and strategic behavior affect aid allocation. Multilaterals solve strategic and coordination problems between donors and, while politics remains significant, there is some evidence for a dilution of this effect.
Subfields: Development, Safety Research, Sociology and Political Science
View Paper: https://www.semanticscholar.org/paper/cda9b1d477611efe7df28cfc1dc8a8fb522c6445
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Citations in the corpus
- Poverty, property rights and collective action: understanding the distributive aspects of common property resource management (2005, background): “It is reasonable to require that policies aimed at allocating natural resources should not eschew equity considerations altogether (Tsur and Dinar, 1995).”
- Estimating the Direct Economic Damage of the Earthquake in Haiti (2010, background): “Bobba and Powell (2006) argue that aid is more effective and when fewer donors are present and multilateral organizations may be seen as a coordinating tool.”
- Debt Sustainability under Catastrophic Risk: The Case for Government Budget Insurance (2007, unknown): “mentioned above, Bobba and Powell (2006) , using a large panel dataset, find no evidence that”
- Development Aid and Economic Growth: A Positive Long-Run Relation (2009, unknown): “…finding may be surprising in light of arguments that multilateral aid is less plagued by political considerations than bilateral aid or that it solves strategic and coordination problems among donors and hence is more likely to be allocated based on recipient country needs (Bobba & Powell, 2006).”