Aid Allocation and Practice: Multilateral Organizations

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Presentation transcript:

Aid Allocation and Practice: Multilateral Organizations International Development Cooperation: Theory & Practice SNU GSIS Aid Allocation and Practice: Multilateral Organizations

Multilateral Aid: How much?

Multilateral Aid: How much?

Multilateral Aid: by bilateral donors

Multilateral Aid: by bilateral donors

Trends and Issues Multilateral ODA about 30% Multilateral ODA not been increased as much as ODA Total use of multilateral system including multi-bi ODA is about 40% Non-core(multi-bi) aid on the rise Non-DAC share is reported about 22% (2010) Multilateral organizations to broaden funding source to middle-income countries and private foundations Proliferation of aid agencies: over 210 major organizations and funds, trust funds, etc. Bilateral donor’s domestic concerns accountability and control balance between bilateral and multilateral allocations?

Multilateral Development Agencies: UN Assessed contributions vs voluntary core contributions More than 40 UN agencies for development purpose

Why Multilateral Organizations? Advantages of multilateral system (OECD DAC) Appropriate vehicle for tackling global issues because of political legitimacy Broader technical base than individual bilateral donors Economies of scale The role of aid agencies (Martens 2005) To reduce transaction costs: ex-ante costs & ex-post uncertainties To mediate preferences between donor and recipient Multilateral agencies collective action: minimize risks and strengthen legitimacy and credibility of unpopular programmes Economies of scale of scope in knowledge production Benefits for donors and recipients?

Aid allocation by Multilateral Agencies The Determinants of Aid Allocation by Regional Multilateral Development Banks and United Nations Agencies (Neumayer 2003) 4 MDBs and 3 UN agencies, 1983-1997 DV: share of total amount allocated in recipient Regressors population per capita income Physical Quality of Life Index (PQLI) colony experience distance from major bilateral donors political freedom integrity rights military expenditure arms import low corruption

Determinants of aid allocation by MOs (1) Aggregate Multilateral Aid

Determinants of aid allocation by MOs (2) By individual agencies: UNDP and UNICEF UNICEF

Q & A