 On the delegation of aid implementation to multilateral agenciesJournal of Development Economics, 2018, vol. 133, issue C, 295-305 Abstract: Some large multilateral agencies implement aid projects in a broad range of sectors, with aid disbursements showing a strong overlap with those of bilateral donors. Why do donors delegate sizable shares of their aid to large non-specialized agencies for implementation? This paper develops a game theoretic model to explain this puzzle. Donors delegate aid implementation to strengthen aid selectivity, incentivizing policy improvements in recipient countries, which in turn improves the development effectiveness of aid. Aid delegation is optimal for donors who disagree on the optimal distribution of aid precisely when an agency represents the average donor. In the model, non-selective bilateral aid can coexist with selective aid implemented by a multilateral agency funded by those same bilateral donors. Keywords: Foreign aid; Trust funds; Aid selectivity; Multilateral agency (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:133:y:2018:i:c:p:295-305 DOI: 10.1016/j.jdeveco.2018.02.007 Access Statistics for this article Journal of Development Economics is currently edited by M. R. Rosenzweig More articles in Journal of Development Economics from Elsevier |
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