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THE IMPACT OF AID ON BUREAUCRATIC QUALITY: DOES THE MODE OF DELIVERY MATTER?
Author(s) -
Selaya Pablo,
Thiele Rainer
Publication year - 2012
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.1759
Subject(s) - bureaucracy , discretion , limiting , quality (philosophy) , business , mode (computer interface) , public economics , economics , political science , engineering , law , mechanical engineering , philosophy , epistemology , politics , computer science , operating system
We show that the impact of foreign aid on bureaucratic quality in recipient countries varies with the mode of delivery. Specifically, grants are found to impair the functioning of the bureaucracy, whereas loans are not. The negative impact of grants is larger when they are given as budget support rather than as assistance for specific projects or for programmes in general. Our results thus suggest that the probability of adverse effects rises with the degree of discretion recipients have over the incoming resources, which is in conflict with donors' recent emphasis on strengthening local ownership by limiting the conditions attached to foreign aid. Copyright © 2010 John Wiley & Sons, Ltd.