Project design decisions of egalitarian and non-egalitarian international organizations: Evidence from the Global Environment Facility and the World Bank

Abstract

Foreign aid flows result from agreements reached between states that need resources and other states or international organizations that can provide those resources. Recent literature has argued that different international development organizations bargain with aid-receiving states in particular ways. Specifically, some authors argue that non-egalitarian international development organizations seek to secure more gains when bargaining with economically weak states. Global Environment Facility projects are negotiated by the international agency that will implement the project, allowing us to examine this claim in the context of a set of similar development projects. Correcting and reanalyzing an existing dataset describing the composition of financing in GEF projects, we find no evidence that the financing terms provided by different GEF implementing agencies varies by the type of organization. Both egalitarian and non-egalitarian agencies provide more external funding to poorer countries. We replicate this result using data from development projects financed by the World Bank, the archetypal non-egalitarian international organization. We discuss how our results are consistent with organizational behavior that originates in the interests of an international bureaucracy oriented toward poverty alleviation.