Corrupt Governments Do Not Receive More State-to-State Aid: Governance and the Delivery of Foreign Aid through Non-State Actors

Martin Acht, Toman Barsbai, Rainer Thiele

Research output: Contribution to journalArticle (Academic Journal)peer-review

Abstract

A core result of the aid allocation literature is that the quality of governance in recipient countries does not affect the amounts of foreign aid received. Donor countries may still give aid to poorly-governed countries because of a dilemma they face: those countries most in need typically also lack proper institutions. This paper argues that donors try to resolve this dilemma by delivering aid through non-state actors. Using aid shares as well as absolute amounts of aid allocated through state and non-state channels and considering different dimensions of governance, we provide evidence that bypassing governments via NGOs and multilateral organizations is indeed a response to weak recipient state institutions. The effect is stronger in aid sectors where donors can more easily switch between channels, and weaker for higher levels of economic self-interest among donors.
Original languageEnglish
Pages (from-to)20-33
Number of pages14
JournalJournal of Development Economics
Volume114
Early online date4 Dec 2014
DOIs
Publication statusPublished - 1 May 2015

Fingerprint

Dive into the research topics of 'Corrupt Governments Do Not Receive More State-to-State Aid: Governance and the Delivery of Foreign Aid through Non-State Actors'. Together they form a unique fingerprint.

Cite this