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Grading foreign aid agencies: Best practices across traditional and emerging donors
Author(s) -
Palagashvili Liya,
Williamson Claudia R.
Publication year - 2021
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/rode.12747
Subject(s) - transparency (behavior) , aid effectiveness , best practice , agency (philosophy) , grading (engineering) , emerging markets , politics , economics , public economics , business , accounting , political science , economic growth , finance , developing country , sociology , management , engineering , social science , civil engineering , law
Despite the rapid growth of non–Development Assistance Committee (DAC) emerging donors, these non‐traditional donors are historically left out of the discussion on aid effectiveness. In this paper, we provide the first full evaluation of aid agency best practices across multiple agency categories. We rank and compare DAC donors, emerging non‐DAC donors, and multilateral and UN agencies in the following five best practice categories: transparency, overhead costs, aid specialization, selective allocation, and effective delivery channels. Contrary to public impressions that emerging donors engage in worse practices, we find that non‐DAC agencies rank similarly to DAC donors: Both groups are equally poor performers. Emerging donors engage in less aid fragmentation across countries and use fewer ineffective delivery channels. Traditional DAC donors, however, provide more transparent reporting. Overall, we find that multilateral agencies and UN donors outperform both DAC and non‐DAC bilateral agencies. Collectively, our results suggest that most aid donors do not meet their own standards for best practices, and this finding is not unique to emerging donors. We highlight how our results reflect the broader political economy of aid allocation.