SUMMARYThe aid system itself is regarded by many as a major problem of present-day development cooperation causing substantial transaction costs for recipients. Particularly, the expansion of bilateral and multilateral donors and the way they spread their aid money over many recipients, projects and sectors is seen as being at the base of these supply-side problems. This article contributes to the discussion by bringing for the first time the non-governmental organisation channel into the equation based on a data set of 73 Dutch non-governmental organisations. Besides, it calls attention to the 'philanthropist' channel and shows that fragmentation and proliferation are not restricted to official aid agencies but constitute an aid channel-wide problem. This also means that solutions to this problem can no longer be restricted to only part of the aid architecture.

Public funding to non-governmental development organisations (NGDOs) influences their allocation choices regarding preferred recipient countries for development aid. Instead of strict poverty-orientation criteria for aid allocation, NGDO country choice becomes increasingly aligned with bilateral priorities. Based on original data on Dutch aid delivery to developing countries, combined with detailed information on NGDOs financial structure and country characteristics, we analyse whether and how donor dependency and public subsidies influence NGDO country choice. Independent NGDOs appear strongly inclined to follow public aid priorities. This is attributed to risk-avoidance and complementarity-seeking of independent NGDOs and deliberate non-alignment for identity-seeking of dependent NGDOs.