Multi‐bi Aid in European Development Assistance: The Role of Capacity Constraints and Member State Politics

Abstract

We analyse the patterns of multi‐bi aid in the European Union. Using newly available multi‐bi aid data and a large number of staff interviews at the European Commission, the World Bank and bilateral donors, we draw three conclusions. First, the Commission's capacity constraints and lack of specific expertise have prevented it from becoming an important host of trust funds like other international development organizations. Second, the same capacity constraints can generally explain its extensive participation in trust funds at other international development organizations. In the case of large global funds, however, Commission participation often reflects the outcome of member state politics. Third, once the Commission delegates its aid to multilateral agencies, it does not impose strong substantive earmarking, but requires a high level of legal and administrative controls.

Resourcing International Organizations: Resource Diversification, Organizational Differentiation, and Administrative Governance

“…These dynamics have been conceptualized as ‘double‐delegation’, and new empirical and theoretical discussions emerge on why and how member states decide to accept such complex resource flows (Michaelowa et al. , ). Second, as the article by Bergmann and Fuchs () makes clear, international, private sector standard setting bodies can assume a critical role in IOs’ resourcing.…”

Trust Funds as a Lever of Influence at International Development Organizations

“…Finally, future research could examine the relative weight of ‘influence’ in comparison with other motives underlying the use of trust funds, using quantitative research methods. One alternative motive for why a donor may use trust funds is lack of capacity (Michaelowa et al., ). Moreover, trust funds may be instrumental to roll over aid budgets into the subsequent year, given that in many countries, donor bureaucracies have to spend their funds at the end of the year.…”

“… The figure of U$8 billion excludes the European Union, which has become a pass‐through multilateral in recent years (Michaelowa et al., ). …”

Resourcing International Organisations: So What?

“…In this regard, there is little doubt that the consequences of the changes in the resourcing are daunting. The new resourcing system often includes various layers of delegation between member countries and different organisations responsible for management and finally implementation (see Michaelowa et al., , for the case of the EU). There are high administrative transaction costs to handle hundreds if not thousands of different funds with varying governance structures within a given organisation.…”