The Costs of Favoritism: Is Politically-Driven Aid Less Effective?

Axel Dreher, Stephan Klasen, James Vreeland and Eric Werker ()
Additional contact information
Eric Werker: Harvard Business School

No 4820, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: As is now well documented, aid is given for both political as well as economic reasons. The conventional wisdom is that politically-motivated aid is less effective in promoting developmental objectives. We examine the ex-post performance ratings of World Bank projects and generally find that projects that are potentially politically motivated – such as those granted to governments holding a non-permanent seat on the United Nations Security Council or an Executive Directorship at the World Bank – are no more likely, on average, to get a negative quality rating than other projects. When aid is given to Security Council members with higher short-term debt, however, a negative quality rating is more likely. So we find evidence that World Bank project quality suffers as a consequence of political influence only when the recipient country is economically vulnerable in the first place.

Keywords: United Nations Security Council; political influence; aid effectiveness; World Bank (search for similar items in EconPapers)
JEL-codes: F35 O11 O19 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2010-03
New Economics Papers: this item is included in nep-dev, nep-mic, nep-pol and nep-ppm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published - published in: Economic Development and Cultural Change, 2013, 62 (1), 157-191

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Related works:
Working Paper: The Costs of Favoritism: Is Politically-driven Aid less Effective? (2010)
Working Paper: The costs of favoritism: Is politically-driven aid less effective? (2010)
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