The Money Trail: Ranking Donor Transparency in Foreign Aid

This document is the author's final accepted version of the journal article. There may be differences between this version and the published version. You are advised to consult the publisher's version if you wish to cite from it. Why Aid is Unpredictable: An Empirical Analysis of the Gap between Actual and Planned Aid Flows Forthcoming in: Journal of International DevelopmentGustavo Javier Canavire-Bacarreza Universidad EAFIT Eric Neumayer London School of Economics and Political Science Peter NunnenkampKiel Institute for the World Economy 2 Abstract: Aid flows continue to be volatile and unpredictable, even though it is widely accepted that this erodes the effectiveness of foreign aid. We argue that fragmented donor-recipient relationships, notably the large number of minor aid relations that tend to be associated with donors' desire to 'fly their flag' around the world, increase aid unpredictability. Our empirical analysis of the determinants of aid unpredictability suggests that aid becomes less predictable with more fragmented donor-recipient relationships. Specifically, the effect of fragmentation on overshooting previous spending plans is statistically significant and substantively important. In contrast, fragmented donor-recipient relationships have no effect on the shortfall of actual aid compared to donors' spending plans.

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“…Ghosh and Kharas () use z ‐scores to rank donors according to the transparency of their foreign aid operations.…”

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confidence: 99%

Why Aid is Unpredictable: An Empirical Analysis of the Gap Between Actual and Planned Aid Flows

Canavire‐Bacarreza

Neumayer

Nunnenkamp

2015

J of Intl Development

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“…The total effect – total – is also ranked in the same way, but leaving out four observations (Sweden, Belgium, Australia, and Portugal) with indeterminate effect. Then, following the order of donor rankings according to various criteria from four sources (Birdsall et al., ; Ghosh and Kharas, ; Knack et al., ; Easterly and Williamson, ), the donors are ranked from 1 to 21. Subsequently, Spearman's correlation coefficients are calculated between the donor quality rankings and their aid‐effectiveness rankings.…”

Section: Resultsmentioning

confidence: 99%

Aid, institutions and economic growth in sub‐Saharan Africa: Heterogeneous donors and heterogeneous responses

Wako

2017

Review Development Economics

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This study contributes to the aid-effectiveness debate using panel data from 43 sub-Saharan African countries over the period 1980-2013. Its novelty lies in assessing the intermediary role of institutions and the importance of recipient and donor heterogeneity. The long-run growth effect of (aggregate) aid from "traditional" donors is robustly non-positive, and the indirect effect is negative. Disaggregation reveals donor heterogeneity. Chinese aid outperforms aggregate aid from traditional donors with respect to growth; however, it has a negative institutional effect. Recipient heterogeneity is largely a short-run phenomenon, with only a few countries showing some deviations from shared long-run parameter sets. Comparing donor behavior suggests that the future of aid would benefit more from focusing on quality -particularly, specialization and donor alignment.

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“…Publish What You Fund ranked Japan's MOFA 43rd out of 46 donors (“very poor”) on its transparency index, JICA close to the bottom of the ‘fair’ category at 33, and KOICA “poor” at 41 (Publish What You Fund, ). Ghosh and Kharas () placed Korea last (along with the Inter‐American Development Bank) in an index rating 31 bilateral and multilateral donor agencies on six measures of transparency. Japan ranked 23.…”

Section: Unit Level Analysismentioning

confidence: 99%

The real East Asian Aid model: Development assistance as an instrument of comprehensive security in Japan, South Korea and Taiwan

Atkinson

2018

Development Policy Review

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The Money Trail: Ranking Donor Transparency in Foreign Aid

Cited by 35 publications

References 2 publications

Why Aid is Unpredictable: An Empirical Analysis of the Gap Between Actual and Planned Aid Flows

Why Aid is Unpredictable: An Empirical Analysis of the Gap Between Actual and Planned Aid Flows

Aid, institutions and economic growth in sub‐Saharan Africa: Heterogeneous donors and heterogeneous responses

The real East Asian Aid model: Development assistance as an instrument of comprehensive security in Japan, South Korea and Taiwan

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