Which Donors, Which Funds? : The Choice of Multilateral Funds by Bilateral Donors at the World Bank
The rapid growth of trust funds at multilateral development organizations has been widely neglected in the academic literature so far. Using a simple illustrative model, this paper examines the choice by sovereign donors among various trust fund op...
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| Format: | Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2015/10/25155022/donors-funds-choice-multilateral-funds-bilateral-donors-world-bank http://hdl.handle.net/10986/22872 |
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okr-10986-228722021-04-23T14:04:11Z Which Donors, Which Funds? : The Choice of Multilateral Funds by Bilateral Donors at the World Bank Reinsberg, Bernhard Michaelowa, Katharina Knack, Stephen LIMITED TERRORISM EMPLOYMENT BILATERAL AGENCIES MULTILATERAL AID ACCOUNTING DEVELOPMENT ASSISTANCE DONOR INTEREST PRIVATIZATION AID FINANCING NATIONS STRATEGIES SERVICES PUBLIC SERVICES PORTFOLIO HEALTH PROJECTS MULTILATERAL DEVELOPMENT BANKS VOLUNTARY CONTRIBUTIONS ASSOCIATIONS NEGOTIATION PARTNER COUNTRIES CONFLICT INTERNATIONAL BANK GOVERNANCE ARRANGEMENTS EXPERT CONSTRAINT STATES AID TECHNICAL ASSISTANCE DISEASES LEADS PARTNERSHIPS FOREIGN AID UNION AGREEMENTS RESOURCE MOBILIZATION FOREIGN POLICIES WORLD DEVELOPMENT TRUST ORGANIZATIONS INTERNATIONAL DEVELOPMENT MIDDLE-INCOME COUNTRIES DIVERGENCES MIC TRUST FUNDS FINANCE ADMINISTRATIVE COSTS DIRECTORS ALLOCATION DECISIONS MICS BANKS UNDP DONOR COUNTRIES PROBABILITY MODELS IMF LEAD FOOD SECURITY ACCOUNTABILITY CLIMATE CHANGE MEMBER STATES INTERNATIONAL AFFAIRS INTERNATIONAL TRADE FOUNDATIONS COMPROMISE VALUE DEVELOPMENT BANKS BANK PARTNERSHIP AID INSTITUTIONS ECONOMY TACTICS NATION TRANSACTION COSTS MIDDLE-INCOME COUNTRY INTERNATIONAL COMMUNITY INTERNATIONAL STUDIES IFC GOVERNANCE TAXATION STATE WAR INVESTMENT BILATERAL DONORS RISK ORGANIZATION BILATERAL AID DONORS MULTILATERAL AGENCIES INTERNATIONAL NEGOTIATION UNIVERSITY DEVELOPED COUNTRY LENDING SOCIETY FOREIGN POLICY CONFLICT RESOLUTION GOVERNMENTS AIDS UNITED NATIONS SYSTEM HEALTH SERVICES PEACE RECONSTRUCTION ECONOMIES BILATERAL DONOR DONOR COUNTRY The rapid growth of trust funds at multilateral development organizations has been widely neglected in the academic literature so far. Using a simple illustrative model, this paper examines the choice by sovereign donors among various trust fund options. The authors contend that the choice among the different trust funds involves a fundamental trade-off: larger funds provide donors with the benefit of burden sharing. Conversely, each donor can better assert its individual preferences in a fund with fewer other donors. The theoretical considerations yield testable implications on a range of factors affecting this fundamental tradeoff, most notably the area of intervention of the trust fund and competing domestic interests of donor countries. Using a sample of World Bank trust funds, the paper examines the participation decisions of Organisation for Economic Co-operation and Development/Development Assistance Committee donors over the past decade. In line with the theoretical argument, preference homogeneity among donors as well as indicators for global activities and fragile states assistance are robust determinants of participation in (large) multi-donor funds. In contrast, donors tend to prefer single-donor trust funds in areas in which their national interests dominate. Although they could use bilateral aid for the same purpose, they often prefer to channel their contributions through trust funds at multilateral agencies. Donors thereby reduce their own administrative costs, while benefiting from the expertise of the multilateral agency. These findings confirm prior qualitative case studies and evidence from donor reports, suggesting that reduced reliance on single-donor trust funds—a costly instrument from the perspective of multilateral agencies—can improve the development effectiveness of aid. 2015-11-05T18:54:20Z 2015-11-05T18:54:20Z 2015-10 Working Paper http://documents.worldbank.org/curated/en/2015/10/25155022/donors-funds-choice-multilateral-funds-bilateral-donors-world-bank http://hdl.handle.net/10986/22872 English en_US Policy Research Working Paper;No. 7441 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
LIMITED TERRORISM EMPLOYMENT BILATERAL AGENCIES MULTILATERAL AID ACCOUNTING DEVELOPMENT ASSISTANCE DONOR INTEREST PRIVATIZATION AID FINANCING NATIONS STRATEGIES SERVICES PUBLIC SERVICES PORTFOLIO HEALTH PROJECTS MULTILATERAL DEVELOPMENT BANKS VOLUNTARY CONTRIBUTIONS ASSOCIATIONS NEGOTIATION PARTNER COUNTRIES CONFLICT INTERNATIONAL BANK GOVERNANCE ARRANGEMENTS EXPERT CONSTRAINT STATES AID TECHNICAL ASSISTANCE DISEASES LEADS PARTNERSHIPS FOREIGN AID UNION AGREEMENTS RESOURCE MOBILIZATION FOREIGN POLICIES WORLD DEVELOPMENT TRUST ORGANIZATIONS INTERNATIONAL DEVELOPMENT MIDDLE-INCOME COUNTRIES DIVERGENCES MIC TRUST FUNDS FINANCE ADMINISTRATIVE COSTS DIRECTORS ALLOCATION DECISIONS MICS BANKS UNDP DONOR COUNTRIES PROBABILITY MODELS IMF LEAD FOOD SECURITY ACCOUNTABILITY CLIMATE CHANGE MEMBER STATES INTERNATIONAL AFFAIRS INTERNATIONAL TRADE FOUNDATIONS COMPROMISE VALUE DEVELOPMENT BANKS BANK PARTNERSHIP AID INSTITUTIONS ECONOMY TACTICS NATION TRANSACTION COSTS MIDDLE-INCOME COUNTRY INTERNATIONAL COMMUNITY INTERNATIONAL STUDIES IFC GOVERNANCE TAXATION STATE WAR INVESTMENT BILATERAL DONORS RISK ORGANIZATION BILATERAL AID DONORS MULTILATERAL AGENCIES INTERNATIONAL NEGOTIATION UNIVERSITY DEVELOPED COUNTRY LENDING SOCIETY FOREIGN POLICY CONFLICT RESOLUTION GOVERNMENTS AIDS UNITED NATIONS SYSTEM HEALTH SERVICES PEACE RECONSTRUCTION ECONOMIES BILATERAL DONOR DONOR COUNTRY |
| spellingShingle |
LIMITED TERRORISM EMPLOYMENT BILATERAL AGENCIES MULTILATERAL AID ACCOUNTING DEVELOPMENT ASSISTANCE DONOR INTEREST PRIVATIZATION AID FINANCING NATIONS STRATEGIES SERVICES PUBLIC SERVICES PORTFOLIO HEALTH PROJECTS MULTILATERAL DEVELOPMENT BANKS VOLUNTARY CONTRIBUTIONS ASSOCIATIONS NEGOTIATION PARTNER COUNTRIES CONFLICT INTERNATIONAL BANK GOVERNANCE ARRANGEMENTS EXPERT CONSTRAINT STATES AID TECHNICAL ASSISTANCE DISEASES LEADS PARTNERSHIPS FOREIGN AID UNION AGREEMENTS RESOURCE MOBILIZATION FOREIGN POLICIES WORLD DEVELOPMENT TRUST ORGANIZATIONS INTERNATIONAL DEVELOPMENT MIDDLE-INCOME COUNTRIES DIVERGENCES MIC TRUST FUNDS FINANCE ADMINISTRATIVE COSTS DIRECTORS ALLOCATION DECISIONS MICS BANKS UNDP DONOR COUNTRIES PROBABILITY MODELS IMF LEAD FOOD SECURITY ACCOUNTABILITY CLIMATE CHANGE MEMBER STATES INTERNATIONAL AFFAIRS INTERNATIONAL TRADE FOUNDATIONS COMPROMISE VALUE DEVELOPMENT BANKS BANK PARTNERSHIP AID INSTITUTIONS ECONOMY TACTICS NATION TRANSACTION COSTS MIDDLE-INCOME COUNTRY INTERNATIONAL COMMUNITY INTERNATIONAL STUDIES IFC GOVERNANCE TAXATION STATE WAR INVESTMENT BILATERAL DONORS RISK ORGANIZATION BILATERAL AID DONORS MULTILATERAL AGENCIES INTERNATIONAL NEGOTIATION UNIVERSITY DEVELOPED COUNTRY LENDING SOCIETY FOREIGN POLICY CONFLICT RESOLUTION GOVERNMENTS AIDS UNITED NATIONS SYSTEM HEALTH SERVICES PEACE RECONSTRUCTION ECONOMIES BILATERAL DONOR DONOR COUNTRY Reinsberg, Bernhard Michaelowa, Katharina Knack, Stephen Which Donors, Which Funds? : The Choice of Multilateral Funds by Bilateral Donors at the World Bank |
| relation |
Policy Research Working Paper;No. 7441 |
| description |
The rapid growth of trust funds at
multilateral development organizations has been widely
neglected in the academic literature so far. Using a simple
illustrative model, this paper examines the choice by
sovereign donors among various trust fund options. The
authors contend that the choice among the different trust
funds involves a fundamental trade-off: larger funds provide
donors with the benefit of burden sharing. Conversely, each
donor can better assert its individual preferences in a fund
with fewer other donors. The theoretical considerations
yield testable implications on a range of factors affecting
this fundamental tradeoff, most notably the area of
intervention of the trust fund and competing domestic
interests of donor countries. Using a sample of World Bank
trust funds, the paper examines the participation decisions
of Organisation for Economic Co-operation and
Development/Development Assistance Committee donors over the
past decade. In line with the theoretical argument,
preference homogeneity among donors as well as indicators
for global activities and fragile states assistance are
robust determinants of participation in (large) multi-donor
funds. In contrast, donors tend to prefer single-donor trust
funds in areas in which their national interests dominate.
Although they could use bilateral aid for the same purpose,
they often prefer to channel their contributions through
trust funds at multilateral agencies. Donors thereby reduce
their own administrative costs, while benefiting from the
expertise of the multilateral agency. These findings confirm
prior qualitative case studies and evidence from donor
reports, suggesting that reduced reliance on single-donor
trust funds—a costly instrument from the perspective of
multilateral agencies—can improve the development
effectiveness of aid. |
| format |
Working Paper |
| author |
Reinsberg, Bernhard Michaelowa, Katharina Knack, Stephen |
| author_facet |
Reinsberg, Bernhard Michaelowa, Katharina Knack, Stephen |
| author_sort |
Reinsberg, Bernhard |
| title |
Which Donors, Which Funds? : The Choice of Multilateral Funds by Bilateral Donors at the World Bank |
| title_short |
Which Donors, Which Funds? : The Choice of Multilateral Funds by Bilateral Donors at the World Bank |
| title_full |
Which Donors, Which Funds? : The Choice of Multilateral Funds by Bilateral Donors at the World Bank |
| title_fullStr |
Which Donors, Which Funds? : The Choice of Multilateral Funds by Bilateral Donors at the World Bank |
| title_full_unstemmed |
Which Donors, Which Funds? : The Choice of Multilateral Funds by Bilateral Donors at the World Bank |
| title_sort |
which donors, which funds? : the choice of multilateral funds by bilateral donors at the world bank |
| publisher |
World Bank, Washington, DC |
| publishDate |
2015 |
| url |
http://documents.worldbank.org/curated/en/2015/10/25155022/donors-funds-choice-multilateral-funds-bilateral-donors-world-bank http://hdl.handle.net/10986/22872 |
| _version_ |
1764452288737312768 |