Organizing Aid: Exploring Aid Agency Structure and Change Across OECD-DAC Donors

Abstract

This study provides the first systematic inquiry into the determinants of aid agency structure and change across the five organizational models used by OECD-DAC donors from 1962-2015. In recent years, several donors have reorganized their bilateral aid agencies, sparking debate on the efficacy of different organizational models. Despite such interest, little is known about aid agency structure and the reasons why donors adopt various organizational models and engage in organizational change. This study develops a multidisciplinary theoretical framework for understanding the factors that contribute to the choice of aid agency structure and change. Using a mixed-method, sequential explanatory research design, this framework is tested in two parts. First, this study conducts a multinomial logit and rare-events logit estimation to identify the main determinants of aid agency structure and change across all OECD-DAC donors since the emergence of aid programs. Using a unique dataset, I find that the purpose of aid programs, political ideology of donor governments, size and structural factors contribute to the choice of aid agency structure, while changes in ODA budget size and structural changes within donors typically precede organizational change. Second, findings from the quantitative analysis are supplemented with six in-depth case studies, which explore organizational choices and changes in Ireland, Iceland, the Netherlands, Australia, Japan and Germany. Building on results from the prior section, the case studies highlight the importance of political factors, administrative efficiency, and substantive purposes as determinants of structural choice and change. A key finding from this thesis is that the size of aid agencies influences structural choice and change through efficiency, showing that smaller donors have tended to adopt, and may be better suited, to merged organizational models. This finding represents a first step towards identifying optimal organizational models based on donor characteristics and has the potential to inform the organizational decisions of new and current OECD-DAC members. Overall, this study sheds light on the concept of aid agency structure and provides a starting point for future analysis.