Donor competition for aid impact, and aid fragmentation /
Annen, Kurt, 1967-
Donor competition for aid impact, and aid fragmentation / prepared by Kurt Annen and Luc Moers. - [Washington, D.C.] : International Monetary Fund, ©2012. - 1 online resource (37 pages) - - IMF working paper ; WP/12/204 . - IMF working paper ; WP/12/204. .
Title from PDF title page (IMF Web site, viewed Aug. 13, 2012). "Middle East and Central Asia Dept." "August 2012."
Includes bibliographical references.
Cover; Contents; 1 Introduction; 2 Donor Coordination in Practice: Fragmentation; Figures; 1 Number of Recipient Countries and Global Aid Budget Shares; 2 Global Aid Herfindahl Index; 3 Background Literature; 4 Model; 4.1 Donors Maximize Net Aid Impact; 4.2 Donors Maximize Relative Net Aid Impact; 3 Best-Response Functions with Identical Donors; 4.3 Introducing Fixed Costs; 4 Best-Response Functions with Non-Identical Donors; 4.4 Introducing More Recipients and More Donors; 5 Empirical Evidence; Tables; 1 Larger Donors vs. Smaller Donors; 5 Herfindahl Index and Relative Donor Size. 2 Donor Ranking in Aid Selectivity3 Donor Selectivity and Herfindahl Index; 6 Conclusion; References; Appendix A; Proof of Proposition 1; Description of Best-Response Functions; Proof of Proposition 4; Appendix B; Table 4: Donor Selectivity and MLD; Table 5: Donor Selectivity and Theil Index.
This paper shows that donors that maximize relative aid impact spread their budgets across many recipient countries in a unique Nash equilibrium, explaining aid fragmentation. This equilibrium may be inefficient even without fixed costs, and the inefficiency increases in the equality of donors' budgets. The paper presents empirical evidence consistent with theoretical results. These imply that, short of ending donors' maximization of relative aid impact, agreements to better coordinate aid allocations are not implementable. Moreover, since policies to increase donor competition in terms of aid effectiveness risk reinforcing relativeness, they may well backfire, as any such reinforcement increases aid fragmentation.
1475559577 (electronic bk.) 9781475559576 (electronic bk.) 147550554X 9781475505542 147553924X 9781475539240
Economic assistance.
Aide économique.
assistance.
BUSINESS & ECONOMICS--Economics--Macroeconomics.
POLITICAL SCIENCE--Economic Conditions.
Economic assistance.
Electronic books.
Electronic books.
Electronic books.
HG3881.5.I58 / W67 No. 12/204eb
339.22
Donor competition for aid impact, and aid fragmentation / prepared by Kurt Annen and Luc Moers. - [Washington, D.C.] : International Monetary Fund, ©2012. - 1 online resource (37 pages) - - IMF working paper ; WP/12/204 . - IMF working paper ; WP/12/204. .
Title from PDF title page (IMF Web site, viewed Aug. 13, 2012). "Middle East and Central Asia Dept." "August 2012."
Includes bibliographical references.
Cover; Contents; 1 Introduction; 2 Donor Coordination in Practice: Fragmentation; Figures; 1 Number of Recipient Countries and Global Aid Budget Shares; 2 Global Aid Herfindahl Index; 3 Background Literature; 4 Model; 4.1 Donors Maximize Net Aid Impact; 4.2 Donors Maximize Relative Net Aid Impact; 3 Best-Response Functions with Identical Donors; 4.3 Introducing Fixed Costs; 4 Best-Response Functions with Non-Identical Donors; 4.4 Introducing More Recipients and More Donors; 5 Empirical Evidence; Tables; 1 Larger Donors vs. Smaller Donors; 5 Herfindahl Index and Relative Donor Size. 2 Donor Ranking in Aid Selectivity3 Donor Selectivity and Herfindahl Index; 6 Conclusion; References; Appendix A; Proof of Proposition 1; Description of Best-Response Functions; Proof of Proposition 4; Appendix B; Table 4: Donor Selectivity and MLD; Table 5: Donor Selectivity and Theil Index.
This paper shows that donors that maximize relative aid impact spread their budgets across many recipient countries in a unique Nash equilibrium, explaining aid fragmentation. This equilibrium may be inefficient even without fixed costs, and the inefficiency increases in the equality of donors' budgets. The paper presents empirical evidence consistent with theoretical results. These imply that, short of ending donors' maximization of relative aid impact, agreements to better coordinate aid allocations are not implementable. Moreover, since policies to increase donor competition in terms of aid effectiveness risk reinforcing relativeness, they may well backfire, as any such reinforcement increases aid fragmentation.
1475559577 (electronic bk.) 9781475559576 (electronic bk.) 147550554X 9781475505542 147553924X 9781475539240
Economic assistance.
Aide économique.
assistance.
BUSINESS & ECONOMICS--Economics--Macroeconomics.
POLITICAL SCIENCE--Economic Conditions.
Economic assistance.
Electronic books.
Electronic books.
Electronic books.
HG3881.5.I58 / W67 No. 12/204eb
339.22