Abstract
AbstractMany donors have come to view selectivity in aid allocation—particularly towards countries with good governance—as the key for improving aid effectiveness. This position draws support from research according to which the success of policy reforms depends exclusively on domestic political economy factors. This finding has recently been questioned, however. This paper makes an original contribution to the literature with its attempt to identify the determinants of compliance with World Bank conditionality by employing publicly available data which evaluate a country's compliance directly. Our analysis suggests that poor compliance is not exclusively determined by exogenous factors, which the World Bank cannot influence, but is also a consequence of poor policy design. Better design of reform programmes is essential for greater aid effectiveness. Copyright © 2007 John Wiley & Sons, Ltd.
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