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Governance does matter for the Allocation of Foreign Aid

Barsbai, Toman; Thiele, Rainer (2016), Governance does matter for the Allocation of Foreign Aid, NOPOOR Policy Brief, 9, p. 6. https://basepub.dauphine.fr/handle/123456789/18088

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Type
Rapport
Date
2016
Series title
NOPOOR Policy Brief
Series number
9
Pages
6
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Author(s)
Barsbai, Toman
Kiel Institute for the World Economy
Thiele, Rainer
Kiel Institute for the World Economy
Abstract (EN)
Acknowledging that the effectiveness of development cooperation depends on the quality of governance in recipient countries, donors may still give foreign aid to poorly governed recipients because of a dilemma they face: those countries most in need typically also lack good institutions. This policy brief shows that donors resolve this dilemma by bypassing weak state institutions and delivering more aid through NGOs and multilateral organizations. In doing so, they may however forego the opportunity to help improve local institutions and thereby foster long-run development.
Subjects / Keywords
foreign aid; governance; State institutions
JEL
L31 - Nonprofit Institutions; NGOs; Social Entrepreneurship
F35 - Foreign Aid