When Do Donors Trust Recipient Country Systems?
The 2005 Paris Declaration on Aid Effectiveness sets targets for increased use by donors of recipient country systems for managing aid. The target is premised on a view that country systems are strengthened when donors trust recipients to manage ai...
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2012/04/16194779/donors-trust-recipient-country-systems-donors-trust-recipient-country-systems http://hdl.handle.net/10986/6022 |
| Summary: | The 2005 Paris Declaration on Aid
Effectiveness sets targets for increased use by donors of
recipient country systems for managing aid. The target is
premised on a view that country systems are strengthened
when donors trust recipients to manage aid funds, but
undermined when donors manage aid through their own separate
parallel systems. This study provides an analytical
framework for understanding donors' decisions to trust
or bypass country systems. Empirical tests are conducted
using data from three OECD-DAC surveys designed to monitor
progress toward Paris Declaration goals. Tests show that a
donor's use of the recipient country's systems is
positively related to: (1) the donor's share of aid
provided to the recipient (a proxy for the donor's
reputational stake in the country's development); (2)
perceptions of corruption in the recipient country (a proxy
for the trustworthiness or quality of the country's
systems); and (3) public support for aid in the donor
country (a proxy for the donor's risk tolerance).
Findings are robust to corrections for potential sample
selection, omitted variables or endogeneity bias. |
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