Fungibility and the Flypaper Effect of Project Aid : Micro-Evidence for Vietnam
While most economists assume that aid is fungible, most aid donors behave as if it is not. The authors study recipient government responses to development project aid in the context of a specific World Bank-financed project. They estimate the impac...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2007/02/7367875/fungibility-flypaper-effect-project-aid-micro-evidence-vietnam http://hdl.handle.net/10986/7167 |
| Summary: | While most economists assume that aid is
fungible, most aid donors behave as if it is not. The
authors study recipient government responses to development
project aid in the context of a specific World Bank-financed
project. They estimate the impact of a rural road
rehabilitation project in Vietnam on the kilometers of roads
actually rehabilitated and built. Using local-level survey
data collected for this purpose, the authors test whether
the evidence supports the standard economic argument that
there will be little or no impact on rural roads
rehabilitated, given fungibility. They find evidence that,
although project aid impacts on rehabilitated road
kilometers were less than intended, more roads were built in
project areas. The results suggest that there was
fungibility within the sector, but that aid largely stuck to
that sector. |
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