International Coordination and the Effectiveness of Aid. (May 2015)

• Record Type: Journal Article
• Authors: Bigsten, Arne; Tengstam, Sven
• Is Part Of: World development. Volume 69(2015)
• Page Start: 75
• Page End: 85
• Publication Date: 2015-05
• Subjects: donor coordination -- Paris agenda -- aid effectiveness; Economic history -- 1990- -- Periodicals; Economic assistance -- Developing countries -- Periodicals; 330.9
• DOI: 10.1016/j.worlddev.2013.12.021
• Languages: English
• ISSNs: 0305-750X

Abstract

Highlights: The paper quantifies the effects of improved donor coordination on aid effectiveness. Concentration to fewer partner countries and program-based approaches reduce costs. Poverty reduction is much more efficient if country-allocation is optimized. Summary: This paper seeks to quantify the effects of improved donor coordination on aid effectiveness. Empirical estimates are first provided of the reductions in transaction costs that can be achieved by better donor coordination via concentration to fewer partner countries and a shift from project aid to program-based approaches. Further estimates are presented showing how much could be gained in terms of poverty reduction by optimizing aid allocation across countries. The potential poverty reduction would be huge, but there are severe political implementation constraints. The paper concludes that much could be gained in terms of aid effectiveness from improved donor coordination.