Corruption and Aid

No aid modality, agency or recipient is free from corruption risks. Find resources on the scope and nature of these risks and how they can be identified and addressed.

Concern about possible corruption in aid flows and projects has grown with increased pressure on donor aid budgets and greater attention to aid effectiveness. Not every donor, recipient or project will be equally exposed to corrupt practices; the context, modalities, choice of partners, and systems for detection all affect risk levels. Equally important is how aid providers respond and how they promote integrity from within.

 Among the resources in this U4 Theme Page you will:

 

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Contact

Nils Taxell

Senior Advisor

nils.taxell@cmi.no

+47 47938075

Interview with Steve Berkman, author of World Bank and the Gods of Lending,

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Author: Knack, S. and Eubank, N.
Release date: July 2009

Aid and Trust in Country Systems

It is generally understood 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. 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.

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Author: Kaufmann, D.
Release date: February 2009

Aid Effectiveness and Governance: The Good, the Bad and the Ugly

This special report argues that the new world reality, following the financial crisis, forces us to think again, and signals the end of the “business as usual” era. It goes on to say that the official aid industry was already behind the curve prior to the crisis and that now the catching up that is required is vaster, necessitating a rethinking of aid strategies and the approach to aid effectiveness. There is a need for concrete attention to governance and political corruption, to the IT revolution, free media, and innovations in public-private partnerships. It is also paramount to take in the reality of the new role in aid of non-traditional official donors as well as that of private donors.

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