Aid and Trust in Country Systems
The 2005 Paris Declaration on Aid Effectiveness sets targets for increased use by donors of recipient country systems for managing aid. A consensus view holds that country systems are strengthened when donors trust recipients to manage aid funds, b...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090720134118 http://hdl.handle.net/10986/4197 |
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okr-10986-41972021-04-23T14:02:16Z Aid and Trust in Country Systems Knack, Stephen Eubank, Nicholas ADVERSE CONSEQUENCES ADVERSE IMPACTS AGGREGATE DEMAND AID AID AGENCIES AID ALLOCATION AID FLOWS AID PROGRAMS ANECDOTAL EVIDENCE CAPACITY BUILDING COMPANION COMPARATIVE ADVANTAGE COMPARATIVE ADVANTAGES COMPREHENSIVE DEVELOPMENT COMPREHENSIVE DEVELOPMENT FRAMEWORK DEBT DEVELOPMENT AID DEVELOPMENT ASSISTANCE DEVELOPMENT BANKS DEVELOPMENT BENEFITS DEVELOPMENT COOPERATION DEVELOPMENT ECONOMICS DEVELOPMENT GOALS DEVELOPMENT IMPACT DEVELOPMENT ISSUES DEVELOPMENT OBJECTIVES DEVELOPMENT POLICY DEVELOPMENT RESEARCH DEVELOPMENT STRATEGIES DEVELOPMENT STRATEGY DISEASES DONOR AGENCIES DONOR AGENCY ECONOMETRICS ECONOMIC GROWTH EMPLOYMENT EQUALITY EQUATIONS FISCAL POLICY GDP GDP PER CAPITA GENDER GOVERNMENT PARTICIPATION HUMANITARIAN AID INCLUSION INCOME INTERNATIONAL AID INTERNATIONAL DEVELOPMENT MACROECONOMIC MANAGEMENT MACROECONOMIC STABILITY MARGINAL BENEFITS MARGINAL PRODUCTS MULTILATERAL DEVELOPMENT BANKS NATIONAL DEVELOPMENT NATURAL RESOURCES PARTY POSITIVE EFFECTS PRIORITIES PRIVATE COMPANIES PUBLIC GOOD RENT SEEKING RESOURCE MANAGEMENT SCHOOLS SPECIALISTS STD SUSTAINABILITY TARGETING TECHNICAL ASSISTANCE TECHNICAL SUPPORT TOLERANCE TRANSACTIONS COSTS TRANSPARENCY TUBERCULOSIS VALUATION VALUE ADDED VOTERS The 2005 Paris Declaration on Aid Effectiveness sets targets for increased use by donors of recipient country systems for managing aid. A consensus view holds 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 paper provides an analytical framework for understanding donors decisions to trust in country systems or instead to micro-manage aid using their own systems and procedures. Where country systems are sufficiently weak, the development impact of aid is reduced by donors reliance on them. Trust in country systems will be sub-optimal, however, if donors have multiple objectives in aid provision rather than a sole objective of maximizing development outcomes. Empirical tests are conducted using data from an OECD survey designed to monitor progress toward Paris Declaration goals. Trust in country systems is measured in three ways: use of the recipient s public financial management systems, use of direct budget support, and use of program-based approaches. The authors show using fixed effects regression that a donor s trust in recipient country systems is positively related to (1) trustworthiness or quality of those systems, (2) tolerance for risk on the part of the donor s constituents, as measured by public support for providing aid, and (3) the donor s ability to internalize more of the benefits of investing in country systems, as measured by the donor s share of all aid provided to a recipient. 2012-03-19T19:11:39Z 2012-03-19T19:11:39Z 2009-07-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090720134118 http://hdl.handle.net/10986/4197 English Policy Research working paper ; no. WPS 5005 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ADVERSE CONSEQUENCES ADVERSE IMPACTS AGGREGATE DEMAND AID AID AGENCIES AID ALLOCATION AID FLOWS AID PROGRAMS ANECDOTAL EVIDENCE CAPACITY BUILDING COMPANION COMPARATIVE ADVANTAGE COMPARATIVE ADVANTAGES COMPREHENSIVE DEVELOPMENT COMPREHENSIVE DEVELOPMENT FRAMEWORK DEBT DEVELOPMENT AID DEVELOPMENT ASSISTANCE DEVELOPMENT BANKS DEVELOPMENT BENEFITS DEVELOPMENT COOPERATION DEVELOPMENT ECONOMICS DEVELOPMENT GOALS DEVELOPMENT IMPACT DEVELOPMENT ISSUES DEVELOPMENT OBJECTIVES DEVELOPMENT POLICY DEVELOPMENT RESEARCH DEVELOPMENT STRATEGIES DEVELOPMENT STRATEGY DISEASES DONOR AGENCIES DONOR AGENCY ECONOMETRICS ECONOMIC GROWTH EMPLOYMENT EQUALITY EQUATIONS FISCAL POLICY GDP GDP PER CAPITA GENDER GOVERNMENT PARTICIPATION HUMANITARIAN AID INCLUSION INCOME INTERNATIONAL AID INTERNATIONAL DEVELOPMENT MACROECONOMIC MANAGEMENT MACROECONOMIC STABILITY MARGINAL BENEFITS MARGINAL PRODUCTS MULTILATERAL DEVELOPMENT BANKS NATIONAL DEVELOPMENT NATURAL RESOURCES PARTY POSITIVE EFFECTS PRIORITIES PRIVATE COMPANIES PUBLIC GOOD RENT SEEKING RESOURCE MANAGEMENT SCHOOLS SPECIALISTS STD SUSTAINABILITY TARGETING TECHNICAL ASSISTANCE TECHNICAL SUPPORT TOLERANCE TRANSACTIONS COSTS TRANSPARENCY TUBERCULOSIS VALUATION VALUE ADDED VOTERS |
| spellingShingle |
ADVERSE CONSEQUENCES ADVERSE IMPACTS AGGREGATE DEMAND AID AID AGENCIES AID ALLOCATION AID FLOWS AID PROGRAMS ANECDOTAL EVIDENCE CAPACITY BUILDING COMPANION COMPARATIVE ADVANTAGE COMPARATIVE ADVANTAGES COMPREHENSIVE DEVELOPMENT COMPREHENSIVE DEVELOPMENT FRAMEWORK DEBT DEVELOPMENT AID DEVELOPMENT ASSISTANCE DEVELOPMENT BANKS DEVELOPMENT BENEFITS DEVELOPMENT COOPERATION DEVELOPMENT ECONOMICS DEVELOPMENT GOALS DEVELOPMENT IMPACT DEVELOPMENT ISSUES DEVELOPMENT OBJECTIVES DEVELOPMENT POLICY DEVELOPMENT RESEARCH DEVELOPMENT STRATEGIES DEVELOPMENT STRATEGY DISEASES DONOR AGENCIES DONOR AGENCY ECONOMETRICS ECONOMIC GROWTH EMPLOYMENT EQUALITY EQUATIONS FISCAL POLICY GDP GDP PER CAPITA GENDER GOVERNMENT PARTICIPATION HUMANITARIAN AID INCLUSION INCOME INTERNATIONAL AID INTERNATIONAL DEVELOPMENT MACROECONOMIC MANAGEMENT MACROECONOMIC STABILITY MARGINAL BENEFITS MARGINAL PRODUCTS MULTILATERAL DEVELOPMENT BANKS NATIONAL DEVELOPMENT NATURAL RESOURCES PARTY POSITIVE EFFECTS PRIORITIES PRIVATE COMPANIES PUBLIC GOOD RENT SEEKING RESOURCE MANAGEMENT SCHOOLS SPECIALISTS STD SUSTAINABILITY TARGETING TECHNICAL ASSISTANCE TECHNICAL SUPPORT TOLERANCE TRANSACTIONS COSTS TRANSPARENCY TUBERCULOSIS VALUATION VALUE ADDED VOTERS Knack, Stephen Eubank, Nicholas Aid and Trust in Country Systems |
| geographic_facet |
The World Region The World Region |
| relation |
Policy Research working paper ; no. WPS 5005 |
| description |
The 2005 Paris Declaration on Aid
Effectiveness sets targets for increased use by donors of
recipient country systems for managing aid. A consensus view
holds 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 paper provides an analytical framework for
understanding donors decisions to trust in country systems
or instead to micro-manage aid using their own systems and
procedures. Where country systems are sufficiently weak, the
development impact of aid is reduced by donors reliance on
them. Trust in country systems will be sub-optimal, however,
if donors have multiple objectives in aid provision rather
than a sole objective of maximizing development outcomes.
Empirical tests are conducted using data from an OECD survey
designed to monitor progress toward Paris Declaration goals.
Trust in country systems is measured in three ways: use of
the recipient s public financial management systems, use of
direct budget support, and use of program-based approaches.
The authors show using fixed effects regression that a
donor s trust in recipient country systems is positively
related to (1) trustworthiness or quality of those systems,
(2) tolerance for risk on the part of the donor s
constituents, as measured by public support for providing
aid, and (3) the donor s ability to internalize more of the
benefits of investing in country systems, as measured by the
donor s share of all aid provided to a recipient. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Knack, Stephen Eubank, Nicholas |
| author_facet |
Knack, Stephen Eubank, Nicholas |
| author_sort |
Knack, Stephen |
| title |
Aid and Trust in Country Systems |
| title_short |
Aid and Trust in Country Systems |
| title_full |
Aid and Trust in Country Systems |
| title_fullStr |
Aid and Trust in Country Systems |
| title_full_unstemmed |
Aid and Trust in Country Systems |
| title_sort |
aid and trust in country systems |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090720134118 http://hdl.handle.net/10986/4197 |
| _version_ |
1764390364086534144 |