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What determines earmarked funding to international development organizations? Evidence from the new multi-bi aid data


Eichenauer, Vera; Reinsberg, Bernhard (2016). What determines earmarked funding to international development organizations? Evidence from the new multi-bi aid data. CIS Working Paper 88, University of Zurich.

Abstract

Earmarked aid to international development organizations has quadrupled over the last two decades and now represents almost twenty percent of total aid. This paper introduces a new dataset on earmarked aid, which alternatively has been referred to as multi-bi, restricted, non-core or trust fund aid. The data makes it possible to track the rise of the new aid channel over an extended period of time and in greater detail regarding, e.g., the implementing multilateral organizations. The data include more than 100,000 earmarked projects of 23 OECD donors to 290 multilateral institutions from 1990 to 2012. We graphically illustrate the distribution and patterns of this new aid channel for all actors involved, namely donor governments and their aid-providing agencies, multilateral organizations, and recipient countries, and highlight promising avenues for further research. In a first empirical application of the data, we analyze donors’ heterogeneous use of earmarked aid, and test three lines of argument for the provision of earmarked aid: official donor motives regarding specific recipient needs, public opinion in donor countries, and ‘market-oriented’ donor economies’ use of earmarked aid to ‘bypass’ recipient countries with weak governance. We show that earmarked aid is associated with different donor- and recipient-level factors than traditional or ‘pure’ bilateral aid.

Abstract

Earmarked aid to international development organizations has quadrupled over the last two decades and now represents almost twenty percent of total aid. This paper introduces a new dataset on earmarked aid, which alternatively has been referred to as multi-bi, restricted, non-core or trust fund aid. The data makes it possible to track the rise of the new aid channel over an extended period of time and in greater detail regarding, e.g., the implementing multilateral organizations. The data include more than 100,000 earmarked projects of 23 OECD donors to 290 multilateral institutions from 1990 to 2012. We graphically illustrate the distribution and patterns of this new aid channel for all actors involved, namely donor governments and their aid-providing agencies, multilateral organizations, and recipient countries, and highlight promising avenues for further research. In a first empirical application of the data, we analyze donors’ heterogeneous use of earmarked aid, and test three lines of argument for the provision of earmarked aid: official donor motives regarding specific recipient needs, public opinion in donor countries, and ‘market-oriented’ donor economies’ use of earmarked aid to ‘bypass’ recipient countries with weak governance. We show that earmarked aid is associated with different donor- and recipient-level factors than traditional or ‘pure’ bilateral aid.

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Additional indexing

Item Type:Working Paper
Communities & Collections:06 Faculty of Arts > Institute of Political Science
Dewey Decimal Classification:320 Political science
JEL Classification:F35, F53, F59, O19
Uncontrolled Keywords:Foreign aid, aid channels, earmarked aid, aid budget, donor generosity, governance
Language:English
Date:April 2016
Deposited On:19 Oct 2016 14:25
Last Modified:29 Aug 2017 10:31
Series Name:CIS Working Paper
Number of Pages:60
ISSN:1662-7504
Free access at:Official URL. An embargo period may apply.
Official URL:http://www.cis.ethz.ch/content/dam/ethz/special-interest/gess/cis/cis-dam/Working_Papers/Working.Paper.85.pdf
Related URLs:http://www.cis.ethz.ch/research/working-papers.html
https://www.ethz.ch/content/dam/ethz/special-interest/gess/cis/cis-dam/Research/Working_Papers/WP_2016/CIS_WP_88.pdf

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