Trust funds and the sub-national effectiveness of development aid: evidence from the World Bank

Existing studies imply that multilateral development assistance is more effective than bilateral assistance. However, multilateral assistance is increasingly constrained through earmarked funding where donors restrict the use of their funds. Such funding shifts decision-making power away from multilateral donors and increases transaction costs through more stringent monitoring requirements. We argue that the consequences of these constraints are negative for aid effectiveness. We test this argument by studying the effectiveness of the World Bank in increasing economic growth. Our research design combines novel data on the funding composition of growth-focused development projects between 1995 and 2014 with georeferenced data on their sub-national locations within 50x50km grid cells. Using difference-in-differences estimation, we assess whether local economic development, measured through the Gross Cell Product, increases in areas where core- and trust-funded projects were located in the previous year. We find that while growth-focused projects are generally effective, core-funded projects have a substantially greater impact than trust-funded projects. These findings imply that donors should consider allocating a greater share of their multilateral development assistance as unearmarked contributions if they want to safeguard the development impact of this assistance

Academically trained leaders made a difference during the early stages of the pandemic

Did the educational background of world leaders make a difference to responses to the Covid-19 pandemic? Drawing on a new study, Timon Forster and Mirko Heinzel present evidence that leaders with higher levels of educational attainment were more likely to listen to the advice of experts when the first outbreaks emerged

National action on antimicrobial resistance and the political economy of health care

Antimicrobial Resistance (AMR) is one of the biggest threats to human health in the twenty-first century. A key dimension of global governance in this domain consists of encouraging governments to create national action plans (NAPs) aimed at improving awareness of AMR, improving knowledge through surveillance and research, reducing infection, optimising the use of antimicrobial medicines, and investing in new drugs, vaccines and other interventions. The adoption and implementation of NAPs occur in the context of great political and institutional diversity across countries, and this article examines the consequences of different ways of financing health care. We expect the implementation of NAPs to be more successful in optimising antibiotics use when governments play a larger role in financing health care compared to private expenditure. An analysis of patterns of antibiotic consumption in 191 countries between 2000 and 2018 supports the hypothesis

Harmful side effects: how government restrictions against transnational civil society affect global health

Governments have increasingly adopted laws restricting the activities of international non-governmental organisations (INGOs) within their borders. Such laws are often intended to curb the ability of critical INGOs to discover and communicate government failures and abuses to domestic and international audiences. They can also have the unintended effect of reducing the presence and activities of INGOs working on health issues and deprive local health workers and organisations of access to resources, knowledge, and other forms of support. This study assesses whether legislative INGO restrictions are associated with fewer health INGOs in a wide range of countries and with the ability of those countries to mitigate disability-adjusted life years (DALYs) lost because of 21 disease categories between 1993 and 2017. The findings indicate that restrictive legislation hampered efforts by civil society to lighten the global burden of disease and had adverse side effects on the health of citizens worldwide

Bureaucratic representation and gender mainstreaming in international organizations: evidence from the World Bank

How does the representation of women in international organizations affect the implementation of gender mainstreaming policies? Many international organizations have adopted policies to prevent gender discrimination in their operations, but their implementation is often lackluster. We argue that these shortcomings appear due to a combination of institutional incentives and an underrepresentation of women in their staff. We test the argument in the case of the World Bank, drawing on highly disaggregated staffing data, an instrumental variable strategy, and an elite survey experiment. Our results show that most staff incorporate at least shallow gender mainstreaming in their projects. Deeper implementation of gender mainstreaming is more likely when women staff supervise projects, hold positions of authority, and are more represented as coworkers. These results contribute to understanding the disconnects between talk and action on mainstreaming policies and inform debates on representation in global governance

Informally governing international development: G7 coordination and orchestration in aid

Informal groupings like the G7 aim to address global development challenges but lack the administrative and budgetary capacity to drive change directly. Instead, the G7 seeks to catalyze international action that reflects its priorities. For example, the G7 attempts to set the international development agenda by publishing annual communiqués with actionable commitments designed to influence the behavior of G7 donor countries, non-G7 donor countries, and international organizations. But questions about the G7’s ultimate impact persist, as critics contend the informal G7 can do little more than pay lip service to development challenges. We provide empirical evidence that the G7 shapes international development in two ways. First, when the G7 emphasizes a policy area in its annual communiqués, donors allocate more aid to that policy area. Second, when the G7 highlights a policy area in its annual communiqués, donors establish more trust funds in that policy area. This suggests the G7 serves simultaneous coordination and orchestration roles in international development: it coordinates its member states’ aid and orchestrates non-G7 bilateral and multilateral aid. The study’s theory, approach, and findings can inform further research on whether and how informal organizations ultimately affect states, formal international organizations, international cooperation, and global governance

The social construction of global health priorities: an empirical analysis of contagion in bilateral health aid

Donors of development assistance for health typically provide funding for a range of disease focus areas, such as maternal health and child health, malaria, HIV/AIDS, and other infectious diseases. But funding for each disease category does not match closely its contribution to the disability and loss of life it causes and the cost-effectiveness of interventions. We argue that peer influences in the social construction of global health priorities contribute to explaining this misalignment. Aid policy-makers are embedded in a social environment encompassing other donors, health experts, advocacy groups, and international officials. This social environment influences the conceptual and normative frameworks of decision-makers, which in turn affect their funding priorities. Aid policy-makers are especially likely to emulate decisions on funding priorities taken by peers with whom they are most closely involved in the context of expert and advocacy networks. We draw on novel data on donor connectivity through health IGOs and health INGOs and assess the argument by applying spatial regression models to health aid disbursed globally between 1990 and 2017. The analysis provides strong empirical support for our argument that the involvement in overlapping expert and advocacy networks shapes funding priorities regarding disease categories and recipient countries in health aid

International Monetary Fund programmes and the glass cliff effect

We analyse the impact of International Monetary Fund (IMF) programmes on appointing women leaders in ministerial positions. We hypothesize that women leaders are selected after an incumbent government starts an IMF programme to shift accountability to them during political and economic turmoil. This political manoeuvring of appointing women to leadership positions during a crisis is known as the ‘glass cliff’ effect. We demonstrate substantial evidence for such a ‘glass cliff’ effect using data covering all IMF programmes from 1980 to 2018. Our evidence shows that women are more likely to be appointed to austerity-bearing ministerial positions under IMF programmes but not in positions of authority during negotiations with the IMF. This effect is more pronounced when a country displays worse societal gender norms, a higher level of corruption and a government facing a deeper economic crisis. Importantly, we verify that neither women's leadership nor a higher share of women in government predicts a balance of payments crisis triggering an IMF programme. In other words, women leaders do not govern worse; they are appointed to leadership positions in precarious, crisis-ridden conditions.</p

Trust funds and the sub-national effectiveness of development aid: evidence from the World Bank

Existing studies imply that multilateral development assistance is more effective than bilateral assistance. However, multilateral assistance is increasingly constrained through earmarked funding where donors restrict the use of their funds. Such funding shifts decision-making power away from multilateral donors and increases transaction costs through more stringent monitoring requirements. We argue that the consequences of these constraints are negative for aid effectiveness. We test this argument by studying the effectiveness of the World Bank in increasing economic growth. Our research design combines novel data on the funding composition of growth-focused development projects between 1995 and 2014 with georeferenced data on their sub-national locations within 50x50km grid cells. Using difference-in-differences estimation, we assess whether local economic development, measured through the Gross Cell Product, increases in areas where core- and trust-funded projects were located in the previous year. We find that while growth-focused projects are generally effective, core-funded projects have a substantially greater impact than trust-funded projects. These findings imply that donors should consider allocating a greater share of their multilateral development assistance as unearmarked contributions if they want to safeguard the development impact of this assistance

Earmarked funding and the control-performance trade-off in international development organizations

Since the 1990s, the funding of multilateral development assistance has rapidly transformed. Donors increasingly constrain the discretion of international development organizations (IDOs) through earmarked funding, which limits the purposes for which a donor’s funds can be used. The consequences of this development for IDOs’ operational performance are insufficiently understood. We hypothesize that increases in administrative burdens due to earmarked funding negatively affect the performance of IDO projects. The additional reporting required of IDOs by earmarked funds, while designed to enhance accountability, ultimately increases IDOs’ supervision costs and weakens their performance. We first test these hypotheses with data on project costs and performance of World Bank projects using both ordinary-least-squares and instrumental-variable analyses. We then probe the generalizability of those findings to other organizations by extending our analysis to evaluations of four additional IDOs (AfDB, ADB, CDB, IFAD). Our empirical analysis relies on data on the performance of 7,571 projects approved between 1990 and 2020 and shows that earmarked funding undermines both cost-effectiveness and project performance across IDOs. Donors seeking value for money may consider allocating more money to core funds rather than earmarked funds