Multilateral donors and the security-development nexus: discourse and practice in conflict-affected states

This article assesses how the ‘security-development nexus’ has impacted multilateral aid to conflict-affected states; an area until now understudied. Using a mixed methods approach, we examine both the policy discourse and aid commitments of the major multilateral donors: the European Commission, the World Bank and the UNDP. We investigate the extent to which these donors fund the sectors identified within the policy discourse as crucial to ensuring peace and stability – democratisation and peace, conflict, and security activities – and examine the impact of ‘Western’ security concerns on multilateral aid in conflict-affected states. Our new data indicate that in contrast to policy discourse, post-conflict states receive no more multilateral funding for democracy–building than states which have not suffered from conflict and furthermore, that in the context of the security-development nexus, multilateral aid to conflict-affected states is influenced by the key transnational security concerns of Western states. These results point to a potentially dangerous gap between policy and actual aid commitments, ignore the long-term nature of development and weaken the impartiality of multilateral aid.     

Financing the peace: Evaluating World Bank post-conflict assistance programs

Does World Bank aid to countries damaged by civil conflict meet its stated goals of speeding economic recovery and reducing the risk of conflict recidivism? We contend that the Bank’s success depends on its ability to bolster and signal the credibility of politicians’ commitments to peaceful politics and tailor its programs to the post-conflict environment. In the first systematic evaluation of World Bank post-conflict assistance, we estimate selection-corrected event history models of the effect of Bank programs on recovery and recurrence using an original dataset of all World Bank programs in post-conflict environments. Among key results, we find that the Bank tends to select aid recipients according to their pre-existing probability of conflict recurrence and that, once we control for this non-random selection, the Bank has no systematic effect on either conflict recurrence or economic recovery.     

Reputation concerns in aid conditionality

This paper analyzes the conditions under which reputation concerns induce donors and recipients to respect conditional aid contracts. Donors enforce conditionality if the benefits of improving compliance in future contracts thanks to a tougher reputation exceed the costs of resisting disbursement pressure. The level of conditionality enforcement is optimal if all the costs and benefits of reputation building are internalized by the decision maker. This condition is not satisfied at the World Bank and the IMF, where enforcement is decentralized to country departments which do not internalize the benefits of a tough reputation on other departments. Recipients comply with conditionality if the costs of implementing conditionality are lower than the benefits of securing tranche release thanks to compliance and obtaining future contracts thanks to a good reputation for compliance. Reputation concerns increase recipients’ incentives to comply only if there is some uncertainty on future aid commitments, which is true for successive single-tranche contracts, but not for multi-tranche contracts.     

Finding out rapidly: A soft systems approach to training needs analysis in Thailand

Thailand is experiencing the unfamiliar phenomenon of aid and multilateral agencies such as the World Bank and Asian Development Bank lending money for internal development programmes. In the economic boom years, aid was neither sought nor required since structural development was funded from the growth which South-East Asian countries had begun to take for granted. Today, falling growth and rising unemployment linked to a depreciating currency and weak export markets have meant that Thailand has had to look elsewhere for development capital and to become proficient in managing educational projects. This article describes a rapid training needs analysis of the Thai educational sector commissioned by the British Council, the purpose of which was to discover the capacity of the education sector to undertake and deliver externally funded projects. Using the Kolb learning cycle as a paradigm of good practice, and an adapted version of the soft systems approach to planning, the paper describes a learning process for developing an action plan to produce a training package for enhancing project management skills. Finally, the paper reflects on the experience of the project and sets out some learning objectives for future exercises of this type.     

Selectivity on aid modality: Determinants of budget support from multilateral donors

Since the late 1990s a selection on policy approach to aid was advocated such that more aid should be allocated to countries with good policies, but there is little evidence that this has occurred. This paper argues that donors may exercise selectivity over the aid modality. Specifically, multilateral donors will cede more recipient control over aid by granting more budget support to those recipients with better expenditure systems and spending preferences (towards the poor) aligned with the donor. We test this for European Commission and World Bank budget support over 1997?C2009 and find some support. Both donors have given budget support to almost half of the countries they give aid, and it is usually a significant share of their aid. The principal determinants of receiving budget support are having a poverty reduction strategy in place, which can be considered a good indicator of aligned preferences, and indicators of government efficiency. These variables did not, however, influence the amount of budget support given. Multilateral donors have been more likely to give budget support to countries with aligned spending preferences and better quality systems, even if they have not reallocated the total aid envelope in that way.     

The choice among aid donors: The effects of multilateral vs. bilateral aid on recipient behavioral support

Scholars studying foreign assistance differ over whether multilateral aid is preferable to bilateral aid for promoting development, but nearly all build their cases primarily on highly aggregated cross-national time-series data. We investigate this topic experimentally from the perspective of those whom the foreign aid directly affects: recipient citizens and elites. We thus report results of a survey experiment with behavioral outcomes on more than 3000 Ugandan citizens and over 300 members of Uganda’s Parliament. In spite of a large literature suggesting differences, the findings generally reveal few substantive differences in citizens’ and elites’ preferences and behavior toward the two types of aid. While no strong pattern of differences emerges, limited evidence suggests that the public evinces greater trust in multilateral institutions, and both masses and elites feel that multilateral aid is more transparent. Overall, these null results inform an ever-expanding literature, which is increasingly articulating distinctions between multilateral and bilateral aid. At least in the minds of the recipients, however, multilateral and bilateral aid may not in fact be all that different. This accords with the literature noting the strong overlap in aid organizations and bemoaning the fact that they do not specialize more. Our results raise the question about why have both multilateral and bilateral aid donors if they in effect do the same thing.     

The Road to Pergau Dam: Aid Policy,Ideology, and the Thatcher Government

This analysis charts the changes in British aid policy under the Margaret Thatcher government (1979–1990). In particular, it examines the impact of so-called neo-liberal ideology in overseas development strategy in an era where “structural adjustment”—aid in return for market-based reforms—became World Bank and International Monetary Fund orthodoxy. There is some evidence to show British increases in multilateral aid during the 1980s supported a neo-liberal aid policy. Bilateral aid policy, however, demonstrated a subordination of aid to foreign policy and a pro-business—not ideologically pro-market or neo-liberal—alignment. One of the results of these structural changes was the Pergau Dam scandal at the end of the Thatcher years.     

Good countries or good projects? Comparing macro and micro correlates of World Bank and Asian Development Bank project performance

This paper examines the micro and macro correlates of aid project outcomes in a sample of 3797 World Bank projects and 1322 Asian Development Bank projects. We find that project outcomes vary much more within countries than between countries: only 10–25 % of the variation in project outcomes is between countries, and the rest is within countries. Among country-level macro variables, GDP growth and the policy environment are significantly positively correlated with project outcomes. Among project-level micro variables, shorter project duration and the presence of additional financing are significantly correlated with better project outcomes. In addition, the track record of the project manager in delivering successful projects is highly significantly correlated with project outcomes. We find few significant differences between the two institutions in the relationship between these variables and project outcomes.     

Post-war aid: patterns and purposes

A recent report by the World Bank reiterates the widely held view that donor agencies commit large amounts of funding in the immediate post-conflict phase, only for this to taper off to more ‘normal’ levels once the crisis is over. The World Bank criticises this phenomenon, referred to as ‘frontloading’, claiming that it damages the prospects of economic growth, which in turn undermines the peace. This article argues that the Bank's analysis is flawed because it does not distinguish between commitments and disbursements, or take sufficient account of other factors influencing aid patterns over time and in different settings. Moreover, the link between official aid and post-war economic performance is of only marginal significance. Any critique of aid policies needs to be based on a detailed analysis of what is delivered rather than what is promised, and of the impact of donors' assistance on the ground.     

Does Membership on the UN Security Council Influence Voting in the UN General Assembly?

Recent studies report that temporary members of the UN Security Council receive favorable treatment from the IMF, the World Bank, or in US foreign aid in exchange for their political support for permanent members. Nevertheless, few studies have examined whether this favorable treatment and these benefits have actually made any significant changes in the member states’ voting behavior in the United Nations. To explore this question, we investigate whether membership on the UN Security Council influences a state’s voting in the UN General Assembly. In the analysis of panel data for 197 countries over the period from 1946 to 2008, the empirical results show that elected members of the UN Security Council tend to behave similarly with permanent members, especially with the United States, as the number of loan programs signed with the IMF and the World Bank increases. Also, US foreign aid significantly increases temporary members’ vote coincidence with the United States and other permanent members. In this regard, this article contributes to our understanding of state voting behavior and power politics in international organizations.     

From Swagger to Self-Advocacy: India’s Postgraduate “Transition” in the World Bank

The International Development Association (IDA), the World Bank's facility for low-income countries, has granted India an unprecedented exception to its usual “graduation” policy—extending transitional support to its largest borrower, even though it has crossed the normal eligibility cutoff for IDA’s soft loans (based on per capita income). Before 2012, some Indian officials had called for a “graceful graduation,” believing that India did not need concessionary development assistance any longer. But with IDA graduation imminent in 2013 and facing a limit on borrowing from the Bank’s other window for middle-income countries, the International Bank for Reconstruction and Development, India successfully appealed for continued IDA access. This article draws on official interviews and documents to show how India secured post-graduation transitional support from IDA—suggesting that while India’s leaders seek to present their country as a rising power with influence in multilateral institutions, they can also be pragmatic in their status demands and quietly persuasive in their economic diplomacy.     

Urban governance and multilateral aid organizations: The case of informal water supply systems

This paper explores the different urban governance models proposed by multilateral aid organizations in accessing water through informal supply systems, to assess the rationale and the guiding principles at the basis of their different ‘governance approaches’. There can be no doubt that most developing countries are now experiencing a rapid and unprecedented urban growth, which is bringing about a rising demand for urban services, especially those concerning water supply. To cope with this pressing issue, the response of multilateral aid organizations—such as the World Bank, UN-HABITAT and the European Union––has been represented by the design and implementation of different urban governance and management systems, called to support an equitable and efficient access to urban water supply services. This paper focuses on the different urban governance approaches through which multilateral donors support informal networks and small scale providers to provide water supply in cities of developing countries. It highlights how these different urban governance approaches address the overall issues of poverty reduction whilst in reality, in certain cases, they also aim to affect and regulate domestic public policies of Third World countries. In particular, it argues that the governance model proposed––and imposed––by the World Bank continues to belong to a neo-liberal policy agenda, which considers water and urban services as commodities to be managed through widespread competition and market mechanisms. On the contrary, UN-HABITAT, and the European Union to a certain extent, highlight the need for an urban governance system that promotes the ownership of development strategies by local communities and that rests on the principles of inclusiveness and equity.

Membership no longer has its privileges: The declining informal influence of Board members on IDA lending

This paper examines the ability of Board members of the most important multilateral donor to developing countries, the International Development Association (IDA) of the World Bank, to influence IDA allocations toward their home countries. I show that a system of Bank staff ratings of individual countries' policies, which has become more important in IDA lending over time, has systematically reduced the informal power of Board members. I show that while IDA Board members received more IDA commitments than their counterparts prior to 1989, this influence has disappeared since, as the importance of the policy index has increased. The findings are robust to the inclusion of fixed effects and a variety of relevant controls. In order to further support my argument, I also investigate the influence of Board membership on the Bank's policy index itself. I am unable to establish any positive relationship between Board membership and the index, either during the Cold War or afterwards. The findings not only shed important light on the internal workings of World Bank allocations to poor countries, but also highlight the ways in which institutional designs can affect the balance of informal power in international institutions.     

Making Room at the Negotiating Table: The Growth of Diplomacy between Nation-State Governments and Non-State Economic Entities

The study of diplomacy has traditionally focused on relationships and interactions between the governments of nation-states, empires, principalities, and similar politicies. This state-centric view has been challenged in recent times by scholars who have sought to take into account the proliferation of different types of actors in the international arena. This paper address diplomacy between governments and non-state economic entities, a broad category of bodies extending from multilateral economic institutions such as the World Bank, International Monetary Fund, and GATT/World Trade Organization to consultative and knowledge-generating bodies such as the World Economic Forum and International Chamber of Commerce.     

Eurodad's campaign on multilateral debt: The 1996 HIPC debt initiative and beyond

'Multilateral debt is not a widespread problem for Severely Indebted Low Income Countries' wrote the World Bank in September 1994. Two years later, the International Financial Institutions-the World Bank and the International Monetary Fund-agreed to a proposal to bring the debt of Heavily Indebted Poor Countries (HIPCs) to sustainable levels. While imperfect, the proposal went some way to meeting the demands of NGOs which, with progressive forces both within the World Bank and among creditor countries, have played a crucial role in this process. While the multilateral debt problem is now too great to ignore, the authors maintain that it has been the persistent pressure of these players that has been responsible for the enormous progress made by the IFIs.     

What determines earmarked funding to international development organizations? Evidence from the new multi-bi aid data

Earmarked aid to international organizations has quadrupled over the last two decades and now represents almost 20% of total aid. This paper introduces a new dataset on earmarked aid, which alternatively has been referred to as multi-bi, restricted, non-core or trust fund aid. The data make it possible to track the rise of the new aid channel over an extended time period and in greater detail regarding, e.g., the implementing multilateral organizations. The data include more than 100,000 earmarked projects of 23 OECD donors to 290 multilateral institutions from 1990 to 2012. We graphically illustrate the patterns in earmarked aid for all actors: donor governments and their aid-providing agencies, multilateral organizations, and recipient countries. We also highlight promising research questions that can be analyzed with the multi-bi data. In a first empirical application of the data, we analyze four suggested donor motives for earmarked aid at the donor-recipient level. Contrary to donor claims, we find that earmarked aid and bilateral aid target the same recipients. We also find evidence that some donors use earmarked aid to bypass recipient countries with weak governance. Overall, our explorative analysis suggests that earmarked aid serves many purposes and that donors use it in different ways. This calls for more fine-grained research on the reasons and implications for earmarked aid.     

‘Country ownership’: a term whose time has gone

The term ‘country ownership’ refers to a property of the conditionality attached to programmes, processes, plans, or strategies involving both a ‘domestic’ party (generally a nation state) and a foreign party (generally the IMF, the World Bank, the Regional Development Banks, and other multilateral and bilateral institutions). Under what circumstances and how can the concept of country ownership be relevant to a country with a myriad heterogeneous and often conflicting views and interests? Or to a country whose government's representational legitimacy or democratic credentials are in question? The author argues that the term has been abused to such an extent that it is at best unhelpful and at worst pernicious: a term whose time has gone.     

Plus ça change, … : The Allocation of French ODA to Africa During and After the Cold War

France is frequently identified as the country whose official development assistance (ODA) aid program is most oriented toward the promotion of its foreign policy goals. We examine whether France reoriented the allocation of its aid in Africa to reflect changing priorities in the 1990s. Using panel data, we compare the patterns in French aid allocation to African recipients during the period 1980–1989 with that during the period 1990–2000. We find that nearly all the same political, economic, diplomatic, and cultural variables that explain French ODA allocation during the Cold War apply in the second period as well, though to a slightly lesser degree. The predictive strength of the prior years’ ODA commitments did increase in magnitude, suggesting that bureaucratic inertia increasingly exerts a formidable force in such decisions.     

Diplomatic Asylum and Fang Lizhi

In 1968, the newly appointed World Bank president, Robert McNamara, asked former Canadian Prime Minister Lester B. Pearson to chair a Bank Commission on International Development in hopes that he could revive the North’s flagging commitment to foreign aid promised under the banner of the Decade of Development. The Commission and its Report—Partners in Development—have a general reputation as farsighted approaches to problems of official development assistance. In Canada, the Pearson Commission is viewed through the lens of Canada’s commitment to Middle Power multilateralism. This analysis tests both interpretations by examining the Commission and the conception and reception of its work. Whilst the Middle Power concept circumscribed Pearson’s role and effectiveness, the Commission succeeded in helping Canada’s chief ally, the United States, share the burden of development assistance with its European allies. As in the realm of peacekeeping, Pearsonian development diplomacy was as much about shoring up relations with Northern allies as it was with developing new Southern friendships.