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.     

Donor influence in multilateral development banks: The case of the Asian Development Bank

This paper explores the influence of Japan and the United States over the geographic distribution of Asian Development Bank funds. Estimation using panel data for less developed Asian countries from 1968 to 2002 suggests significant donor influence with inconsistent weight placed on humanitarian criteria given limited funding for the region's largest countries, China and India. Comparing the results with research on World Bank loan allocation suggests donor interests are relatively more important in the ADB. This finding justifies the existence of the ADB on political grounds but calls into question its relative merits on economic grounds. JEL codes F35 · O19     

Choosing international organizations: When do states and the World Bank collaborate on environmental projects?

While international cooperation research emphasizes institutional design, states mostly interact with existing organizations. How do states choose organizations for cooperation? We develop a theory of agency choice for development projects, emphasizing the importance of domestic institutions, the scope of cooperation, and the resources of the implementing agency. If states are to cooperate with funding agencies that have abundant resources, such as the World Bank, they must accept more stringent conditions on project implementation. We argue states accept the stringent conditions that resourceful organizations demand if the public goods from project implementation are highly valuable. Empirically, this is the case for democratic states, large projects, and projects that produce national instead of global public goods. We test this theory using data on 2,882 Global Environment Facility (GEF) projects, 1991–2011. The GEF offers an ideal case because various implementing agencies are responsible for the actual projects. States implement projects in collaboration with the World Bank, which has the most expertise and resources among the GEF’s implementing agencies, if their regime type is democracy, the project size is large, and the benefits are primarily national. Qualitative evidence sheds light on causal mechanisms.     

吉尔吉斯斯坦社会保障“名义账户制”运行10年经验与教训

10年前,吉尔吉斯斯坦在世界银行等国际经济组织的帮助下,对从苏联继承下来的传统社会养老制度进行了艰难的改革,其主要成绩是引入了名义账户制度.10年来,吉尔吉斯斯坦名义账户制度改革虽然暂时缓解了其经济和社会转型初期暴露的突出矛盾,但由于种种客观原因和制度设计问题,吉尔吉斯斯坦并没有从根本上解决社会养老体系内部存在的问题,名义账户制度运行存在许多制度障碍,改革不彻底,未来的政策改革仍然任重道远.     

Informal influence in the Asian Development Bank

Through case studies and empirical analysis, scholars have uncovered convincing evidence that individual donors influence lending decisions of international financial institutions (IFIs) such as the World Bank and the Asian Development Bank. Less clear are the mechanisms by which donors exert influence. Potential mechanisms are either formal or informal. Formal influence is through official decisions of the board of executive directors while informal influence covers all other channels. This paper explores the role of informal influence at the Asian Development Bank by examining the flow of funds after loans are approved. Controlling for commitments (loan approvals), are subsequent disbursements linked to the interests of the key shareholders, Japan and the U.S.? I compare these findings with results for the World Bank and consider implications for institutional reforms.     

Is two better than one? The effects of IMF and World Bank interaction on growth

We estimate the impact on economic growth of the joint participation in both IMF and World Bank programs. More specifically, using panel data for 128 developing countries over the period 1982?C2005, and employing 2SLS to control for the possible endogeneity of participation in an IMF/World Bank program, we find that the interaction between these two organizations has a positive and significant impact on growth. The paper then opens up interesting new research questions related to investigate further on the effects of Bank?CFund simultaneous action and, to the extent to which their stronger impact on growth may depend on Bank?CFund interaction, also ways to optimize their joint effect through greater cooperation.     

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.     

The implications of the rights-based approach on NGOs’ funding

Existing literature suggests that NGOs that adopt the rights-based approach (RBA) may secure more funds from rights-based donors, otherwise they would face funding cuts from such donors. This article investigates the extent to which RBA affects decisions made by ActionAid, intermediate NGOs, and CBOs on accepting certain funding conditions. Research participants from NGOs stated that RBA limits their funding because many donors prefer service delivery. They are also selective about where they apply for funds. For CBO participants, RBA posed fewer problems in terms of their funding decisions. Intermediate NGO and CBO participants claimed that RBA motivates them to locate alternative funding sources locally.     

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.     

The politics of contract allocation in the World Bank

Scholarship on informal politics in multilateral aid organizations investigates all stages of the allocation process - from project identification to aid disbursement and project evaluation. Yet, one area remains almost entirely overlooked in the literature - allocation of aid-financed contracts. This article aims to address the shortcoming of the existing research and develops a theory of contract allocation in a prominent multilateral aid organization – the World Bank. The theoretical argument explores the relationship between formal procurement arrangements and recipients’ control over contract allocation, and the role of this relationship in explaining patterns of contract allocation. My empirical analyses using data on the World Bank’s contracts provide evidence of recipients’ ability to allocate contracts in favor of domestic companies, as well as bilateral aid donors.     

Judicial reform and international legal technical assistance in Latin America

In Latin America judicial reform is crucial to both economic liberalization and democratization including the advancement of the rule of law and human rights agendas. The World Bank, the Inter‐American Development Bank, the United States Agency for International Development and other donors have responded with international legal technical assistance to a variety of projects, in pursuit of a number of different objectives. But for the most part governance improvements and economic concerns have been uppermost, reflecting the prominent position of the World Bank. The situation has both advantages and disadvantages. The future of judicial reform in the region will depend on the capacity to build a political consensus on the way forward, not just among donors but within the societies themselves.     

Political ideology, quality at entry and the success of economic reform programs

This study investigates how government ideology matters for the success of World Bank economic policy loans, which typically support market-liberalizing reforms. A simple model predicts that World Bank staff will invest more effort in designing an economic policy loan when faced with a left-wing government. Empirically, estimates from a Heckman selection model show that the quality at entry of an economic policy loan is significantly higher for governments with a left-wing party orientation. This result is robust to changes in the sample, alternative measures of ideology, different estimation techniques and the inclusion of additional control variables. Next, robust findings from estimating a recursive triangular system of equations indicate that leftist governments comply more fully with loan agreements. Results also suggest that World Bank resources are more productive—in terms of reform success—in the design of policy operations than in their supervision. Anecdotal evidence from several country cases is consistent with the finding that left-wing governments receive higher quality loans.     

Congressional voting on funding the international financial institutions

The United States is the largest contributor to the International Monetary Fund (IMF) and the World Bank, providing resources in exchange for voting power in these international financial institutions (IFIs). While the Treasury Department manages the day-to-day aspects of US participation in these institutions, Congress retains authority on funding. With the aim of understanding the microincentives of US support for the IFIs, I analyze congressional voting on bills to fund the IFIs. I argue that members of congress are more likely to support a funding increase (1) the more “liberal” their ideology, (2) the larger the share of campaign contributions they get from banks that specialize in international lending, and (3) the larger the share of voters that gain from economic globalization that reside in their districts. Statistical analyses of voting on five IFI funding bills since 1977 provide support for these arguments.

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二十国集团在全球治理结构中的角色分析

二十国集团作为国际经济合作的主要平台,要在全球经济治理中发挥核心作用,需要处理好与其他国际机构的关系。二十国集团取代了八国集团在国际经济合作中的地位,并相对明确地划分了各自的议题领域;帮助国际货币基金组织和世界银行筹措资金,推动它们进行配额改革,并取得一定进展;承诺抵制贸易保护主义,推动世界贸易组织多哈回合谈判尽快结束;正努力与联合国建立互利合作的关系。     

Lessons of endogenous leadership in Nigeria: innovating to reduce waste and raise incomes in the cassava processing and goat-keeping systems

Agricultural innovations are increasingly emerging from African research scientists. This paper looks at an innovation developed by animal scientists at the University of Agriculture Abeokuta in Nigeria. They identified a method for drying cassava peels, which creates an income source for rural women, reduces environmental waste, and raises the income of goat herders by transforming the cassava waste into animal feed. Initially funded by a World Bank grant, this paper addresses the challenges of securing donor funding for local innovations and presents an argument for a new model of development that supports locally driven solutions to current development issues.     

Political Trust,Corruption, and Ratings of the IMF and the World Bank

There are only a handful of studies that examine public support for the IMF and World Bank. Public opinion data on attitudes to the economy feature prominently in these studies. Utilizing data from the Afrobarometer survey, we find that evaluations of the economy, ideology, and a range of sociodemographic factors including age, gender, employment status, health, education, and living conditions are not significantly related to ratings of effectiveness. Rather, we find that political trust and corruption—two very important concepts in the wider literature on individual-level attitudes toward international relations and foreign policy issues—are strongly associated with ratings of effectiveness.     

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.     

Gender equality needs critical consideration in conflict-affected settings

The World Bank's 2012 World Development Report calls for gender equality on a global level but falls short on its analysis of conflict-affected contexts. It is critical that we understand the needs of vulnerable populations in these settings. This viewpoint draws on findings from research in health reform in conflict-affected contexts to highlight some opportunities and challenges for addressing gender equality in these settings, using the policy priorities outlined in the World Bank report. Drawing on this analysis we argue that more attention and action should be focused on addressing gender inequalities and inequities in neglected conflict-affected states.     

Benin: country profile

Since 1972, Benin has had an official Marxist-Leninist ideology; however, centralized state control contributed to economic stagnation and a search for capital investment. A special section of the World Bank is advising the Government of Benin on public sector reform and privatization, and an agreement with the International Monetary Fund seems likely. At present, 65% of Benin's labor force is engaged in subsistence agriculture, most of which is collectivized, and the gross national product per capita is US$260. The main cash crops are seed cotton and palm oil kernels used in soap and margarine. While women occupy key trade positions in the south of Benin, they are very oppressed in the north. Benin has a population of 4 million. The infant mortality rate is 115/1000 lives births and life expectancy is 43 years. Only 21% of the population has access to clean water. 40% of men, compared to just 17% of women, are literate.