Development Assistance Committee Donors Research Articles

Understanding China's shifting priorities andpriority-setting processes indevelopment assistance forhealth.

Over the past two decades, China has become a distinctive and increasingly important donor of development assistance for health (DAH). However, little is known about what factors influence China's priority-setting for DAH. In this study, we provide an updated analysis of trends in the priorities of Chinese DAH and compare them to comparable trends among OECD Development Assistance Committee (DAC) donors using data from the AidData's Global Chinese Development Finance Dataset (2000-2017, version 2.0) and the Creditor Reporting System (CRS) database (2000-2017). We also analyse Chinese medical aid exports before and after the start of the COVID-19 pandemic using a Chinese Aid Exports Database. We further explore the potential factors influencing China's shifting priority-setting processes by reviewing Chinese official documents following Walt and Gilson's policy analysis framework (context-actors-process-content) and by testing our conjectures empirically. We find that China has become an important DAH donor to most regions if measured using project value, including but not limited to Africa. China has prioritized aid to African and Asian countries as well as to CRS subsectors that are not prioritized by DAC donors, such as medical services and basic health infrastructure. Chinese quarterly medical aid exports almost quintupled after the start of the COVID-19 pandemic. Noticeably, China has allocated more attention to Asia, eye diseases and infectious disease outbreaks over time. In contrast, the priority given to malaria has declined over the same period. Regarding factors affecting priority shifts, the outbreaks of SARS and Ebola, the launch of the Belt and Road Initiative and the COVID-19 pandemic appear to be important milestones in the timeline of Chinese DAH. Unlike stereotypes of China as a 'lone wolf' donor, our analysis suggests multilateral processes are influential in informing and setting Chinese DAH priorities.

Does aid matter for FDI in ECOWAS: Investigating the infrastructure channel

AbstractThis paper investigates whether and how aid targeted at specific sub‐categories of economic infrastructure could assist the economies of 14 Economic Community of West African States to attract higher foreign direct investment (FDI) inflow via improvement in infrastructure in water supply and sanitation, energy, transport and ICT. By relying on the three stage least squares estimation technique that is able to account for endogeneity among structural equations, and utilizing data spanning 2005–2018, we found quite interesting results. First, aid targeted at infrastructure indicates a strong positive effect on the countries’ infrastructure endowment. Second, there is robust evidence that aid promotes FDI, but not necessarily through the infrastructure channel. Targeted aid appears to exert a positive and direct knock‐on effect on FDI—apparently, because investors anticipate the positive effect that targeted aid is almost always inclined to produce on host countries’ infrastructure endowment. Finally, aid allocation by Development Assistance Committee donors seems to have been primarily merit‐based, followed by weaker evidence for “need”. The study recommends, inter alia, more need‐based aid allocation, particularly in economies where initial infrastructure endowment is minimal.

Grading foreign aid agencies: Best practices across traditional and emerging donors

AbstractDespite the rapid growth of non–Development Assistance Committee (DAC) emerging donors, these non‐traditional donors are historically left out of the discussion on aid effectiveness. In this paper, we provide the first full evaluation of aid agency best practices across multiple agency categories. We rank and compare DAC donors, emerging non‐DAC donors, and multilateral and UN agencies in the following five best practice categories: transparency, overhead costs, aid specialization, selective allocation, and effective delivery channels. Contrary to public impressions that emerging donors engage in worse practices, we find that non‐DAC agencies rank similarly to DAC donors: Both groups are equally poor performers. Emerging donors engage in less aid fragmentation across countries and use fewer ineffective delivery channels. Traditional DAC donors, however, provide more transparent reporting. Overall, we find that multilateral agencies and UN donors outperform both DAC and non‐DAC bilateral agencies. Collectively, our results suggest that most aid donors do not meet their own standards for best practices, and this finding is not unique to emerging donors. We highlight how our results reflect the broader political economy of aid allocation.

Are Aid Agencies Changing their Practices?

AbstractUsing data from 2004 to 2008−2012, we provide the first multi‐year agency monitoring of Development Assistance Committee (DAC), multilateral and United Nations (UN) agencies. Our results suggest that, on average, DAC donor performance has declined while multilateral and UN agency performance has increased. Specifically, multilateral and UN agencies are more transparent and specialized while DAC donors are less specialized and failed to improve in other categories. © 2020 John Wiley & Sons, Ltd.

‘Hearts and Minds’: Examining the Kuwaiti Humanitarian Model as an Emerging Arab Donor

In today’s fast-changing international humanitarian landscape, non-traditional/new donors are prominent amongst the more diversified group of humanitarian donors operating in the same settings as Development Assistance Committee donors. Kuwait was the first ‘new donor’ in the Gulf region and was recently given the status of an ‘International Humanitarian Centre’ by the former UN Secretary-General for the role it played in responding to the humanitarian needs of Syria. Yet Kuwaiti humanitarianism remains under-analysed in academic research. This paper aims to provide a more comprehensive understanding of Kuwait’s humanitarian landscape by identifying its humanitarian actors, governing principles, preferred modalities of aid disbursement and by examining Kuwait’s humanitarian strengths, weaknesses and potential.

Do economic institutions count in giving aid? Comparative observations on aid allocation between the U.S. and other Development Assistance Committee members

This study identifies whether the quality of recipient countries’ economic institutions was a determining factor in the aid allocation practices of donor nations. Three criteria that would influence aid decision were proposed: recipient institutions (economic and political), donor strategic interest, and recipient need. By examining a panel of 109 countries during 2007–2016, our findings suggest that there is a distinct contrast in the patterns of aid allocation between the U.S. and the Development Assistance Committee (DAC) of the Organization for Economic Cooperation and Development (OECD) regarding institutional factors—economic and political institutions—while demonstrating not much difference in terms of donor interest and recipient need. The economic and political institutions negatively influence the amount of aid commitment only for the DAC donors. We presume that they focus more on ex-post conditionality than ex-ante selectivity criteria when it comes to the level of recipient economic and political institutions. In addition, our finding does not support the argument that the U.S. behaves more strategically in aid giving practices (Lumsdaine, 1993; Noël & Thérien, 1995). The U.S. is less responsive to conflict situations and the colonial history of a recipient than the DAC donors are.

Donors in transition and the future of development cooperation: What do the data from Brazil, India, China, and South Africa reveal?

SummaryHow are Development Assistance Committee (DAC) donors evolving their financial flows and aid modalities in response to the growing influence and economic power of Southern BRICS? After presenting the shifting landscape of international development cooperation, we explore five hypotheses about the changing nature of DAC aid allocation patterns and modalities in BRICS countries. In our conclusion, we reflect on the evolution of DAC engagement in Brazil, China, India, and South Africa (BASIC countries) and what it might mean for all official donors. Our assessment is that the changing geopolitical environment for development cooperation is once again privileging economic diplomacy concerns within DAC donors, propelling specific kinds of decisions about the choice of instruments, sectors, and modalities in BASIC countries. It would appear that the administrative practice of foreign aid is increasingly derived from changes within the institutional environment for international development.

Are Aid Agencies Changing Their Practices?

Using data from 2004-2008-2012, we provide the first multi-year agency monitoring of Development Assistance Committee (DAC), multilateral, and United Nations (UN) agencies. Our results suggest that, on average, DAC donor performance has declined while multilateral and UN agency performance has increased. Specifically, multilateral and UN agencies are relatively more transparent and specialized while DAC donors are less specialized and failed to improve in other categories.

Are Emerging Donors Engaging in Poor Foreign Aid Practices? A Comparison of Traditional Versus Non-Traditional Aid Agencies

Despite the rapid growth of emerging donors, these non-traditional donors are historically left out of the discussion on aid effectiveness. In this paper, we provide the first full evaluation of aid agency best practices. We rank and compare DAC (Development Assistance Committee) donors, emerging non-DAC donors, multilateral, and UN agencies in the following five best practice categories: transparency, overhead costs, aid specialization, selective allocation, and effective delivery channels. Contrary to the impression that emerging donors engage in worse practices, we find that non-DAC agencies rank similarly to DAC donors: both groups are equally poor performers. Emerging donors engage in less aid fragmentation and do not use ineffective delivery channels. Traditional DAC donors, however, are more transparent. Overall, we find that multilateral agencies and UN donors outperform both DAC and non-DAC bilateral agencies. Collectively, our results suggest that most aid donors do not meet their own standards for best practices, and this finding is not unique to emerging donors. We highlight how our results reflect the broader political economy of aid allocation.

Management of the international development aid system: The Case of Tanzania

AbstractThis article tries to clarify Government behaviours as to how to manage aid in Tanzania. Contrary to the Organisation for Economic Co‐operation and Development (OECD) Development Assistance Committee (DAC) donor intentions, the development aid structure, carefully constructed under the poverty reduction regime in Tanzania, has led to Tanzanian‐owned initiatives toward a national development plan (NDP). Furthermore, this article shows that, in the process of creating an international development aid system, the Tanzanian Government has learned to manage aid in a recipient‐driven manner not only from DAC donors, but also from China.

Brazil's Development Cooperation: Following in China's and India's Footsteps?

The increasing importance of donor countries operating outside of the OECD's Development Assistance Committee (DAC) challenges the existing international aid architecture. In particular, non-DAC donors are suspected to provide aid solely based on self-interest without caring about recipients' need and merit. In this paper, we empirically investigate the aid allocation of one major non-DAC donor, Brazil. We find that Brazil's development cooperation is still predominantly shaped by historic and cultural ties to the Lusophone world and Latin America, while broader political and economic motives play a negligible role. To some extent, Brazil also takes recipients' need and governance into account. This broadly corroborates previous results for China and India, strengthening the conclusion that non-DAC donors are not as different from DAC donors regarding their aid motives as one might suspect. Copyright © 2017 John Wiley & Sons, Ltd.

Comparing Taiwan's foreign aid to Japan, South Korea and DAC

ABSTRACTTaiwan has been all but left out of comparative studies of foreign aid donors. This article places Taiwan's aid program in context, through a comparison with its East Asian neighbors – Japan and Korea – and the OECD Development Assistance Committee (DAC) donors as group. It finds that while Taiwan differs from Japan and Korea in key respects, there are also notable similarities between the three in relation to other DAC donors.

Evidences on Donors Competition in Africa: Traditional Donors versus China

AbstractThis paper describes the aid allocation behaviours of the Development Assistance Committee (DAC) donors and their response to the emergence of China in the aid landscape. Our analysis presents evidences of donors' competition in Africa.We investigate whether African countries with the Chinese influence expanding receive favourable aid modalities from G7 donors over the period 2000–2011. We find a robust positive relationship between the level of aid and the number of China projects a country receives and the level of bilateral aid from G7 donors, even after accounting for standard economic and political factors. Results indicate that DAC donors use bilateral aid to tackle the increasing influence of China in Africa, by delivering more aid to countries with natural resources or strategic political interest. The paper also assesses empirically whether strategic interests and economic competition between DAC donors and China have influenced the composition of aid flows received by African countries.Our empirical strategy is sharpened by the use of a spatial‐X model and a difference‐in‐difference estimation that leverages a ‘natural’ experiment in DAC aid flows in the aftermath of the financial crisis, with China increasing his sphere of influence in Africa. Copyright © 2015 John Wiley & Sons, Ltd.

Promoting ‘good behaviour’ through aid: do ‘new’ donors differ from the ‘old’ ones?

The relationship between development aid and recipients’ ‘good behaviour’ (human rights, democracy, and good governance) has been examined frequently, in a belief that giving more aid to countries with better performance in these areas can motivate their improvement. Most researchers agree that traditional, Development Assistance Committee (DAC) donors reward recipients’ ‘good behaviour’ at least to some extent; however, ‘new’, non-DAC donors have been thus far portrayed as largely unconcerned with these issues. In this paper, I examine the evidence underlying such claims by investigating whether or not human rights, democracy, and good governance play any role in the ‘new’ donors’ aid allocation. I find that, similar to DAC donors, many non-DAC donors pay heed to recipients’ democracy, human rights or good governance records at some point in their aid decision-making process. These results suggest that the fears raised regarding the nature of ‘new’ aid might be unfounded and point to the emergence of stronger global norms vis-à-vis the importance of human rights, democracy, and good governance to development.

Soldiers and development aid

This article argues that military intervention by traditional members of the OECD’s Development Assistance Committee (DAC) has a significant impact on the development aid given to target states. This seemingly innocuous thesis contributes to two literatures. First is the literature on foreign aid, which examines a long list of donor and recipient state variables to explain assistance patterns. It has yet to analyze the signal that DAC military intervention sends about the importance of specific recipient states, however. Second is the literature on foreign policy substitutability, which maintains that increasing the resources allotted to one change-inducing foreign policy tool often reduces the resources available for other tools. Using interrupted time-series panel-corrected standard error estimates of 120 recipient countries from 1960 to 2004, we find that aid flows from traditional DAC donors rise significantly when one or more of their members dispatch soldiers in support of a target government, but gradually recede after troops depart. The opposite pattern holds for interventions that oppose the target government. These outcomes suggest that studies of foreign aid should consider donor state military actions as an additional explanatory variable, and that policymakers may at times view foreign aid and military intervention as complementary rather than competing foreign policy tools.

China's role as a global health donor in Africa: what can we learn from studying under reported resource flows?

BackgroundThere is a growing recognition of China’s role as a global health donor, in particular in Africa, but there have been few systematic studies of the level, destination, trends, or composition of these development finance flows or a comparison of China’s engagement as a donor with that of more traditional global health donors.MethodsUsing newly released data from AidData on China’s development finance activities in Africa, developed to track under reported resource flows, we identified 255 health, population, water, and sanitation (HPWS) projects from 2000–2012, which we descriptively analyze by activity sector, recipient country, project type, and planned activity. We compare China’s activities to projects from traditional donors using data from the OECD’s Development Assistance Committee (DAC) Creditor Reporting System.ResultsSince 2000, China increased the number of HPWS projects it supported in Africa and health has increased as a development priority for China. China’s contributions are large, ranking it among the top 10 bilateral global health donors to Africa. Over 50% of the HPWS projects target infrastructure, 40% target human resource development, and the provision of equipment and drugs is also common. Malaria is an important disease priority but HIV is not. We find little evidence that China targets health aid preferentially to natural resource rich countries.ConclusionsChina is an important global health donor to Africa but contrasts with traditional DAC donors through China’s focus on health system inputs and on malaria. Although better data are needed, particularly through more transparent aid data reporting across ministries and agencies, China’s approach to South-South cooperation represents an important and distinct source of financial assistance for health in Africa.

Characteristics of Korean ODA Allocation by Sector and Type

Korea has been receiving growing attention from the international society since its development has been recognized as the most successful case in history, and it has been expected to deliver its development experiences to developing countries through development cooperation. However, while there are many studies on Korea’s development experience, there are not many studies on the features of Korean official development assistance (ODA) and how to reflect Korea’s experiences in its aid programs. Thus, Korea’s development cooperation system should be studied to identify effective ways to deliver Korea’s development know-how to developing countries. As the first step to study Korean ODA and its relationship with Korea’s development experience, this paper will focus on the special characteristics of Korean ODA’s allocation by sector and type which differs from other OECD’s Development Assistance Committee (DAC) donors. Furthermore, should we consider the special features of Korea’s aid programs as an immature quality that should be improved in the future, or should it be considered as an alternative that can complement the weakness of other donors’ aid? This paper will attempt to answer these questions by analyzing the sector and type allocation of Korean ODA in comparison to other DAC donors.

China’s Foreign Aid and Its Role in the International Architecture

Published by Palgrave Macmillan Though China has long been an aid provider, the recent and remarkable surge in China’s foreign aid has important implications for the global aid architecture. It relies on aid principles that diverge in many ways from those of traditional Development Assistance Committee (DAC) donor countries, particularly in relation to non-interference, mutual benefit and non-conditionality. China’s foreign aid also relies on a mixing of economic cooperation, trade and investment deals. While several Western scholars have examined the Chinese development cooperation system, few voices from China have been heard in European and North American journals and media. This chapter aims to offer a Chinese perspective on the evolution of China’s foreign aid. It focuses on the aid principles that have thus far informed Chinese development assistance, highlighting the successful outcomes achieved so far in Africa and South-East Asia. The chapter also addresses the main shortcomings of the Chinese approach, by recommending the improvement of institutional transparency, and strengthening of dialogue with DAC donors, all with a view towards learning from past experiences and exchanging best practices.

Why Can't We All Just Get Along? The Practical Limits to International Development Cooperation

This paper seeks to explain the factors that inhibit greater collaboration between Development Assistance Committee (DAC) donors and non-DAC donors, arguing that the problem is less about divergent values than about incentives that derive from the politics of today's aid system and architecture, and from different development experiences. It argues that even among like-minded DAC members, progress on aid coordination and cooperation has been disappointing. This augurs badly for advocates of a more harmonious aid system encompassing a broader group of development partners. On this basis, the aid community would be better off defining differential and flexible standards, which permit DAC and non-DAC donors to adhere to those elements most applicable to them. We identify two areas where more collaboration may be feasible. The first is for partner countries to push for greater transparency among donors, which would allow for greater coordination at the recipient country level. The second is to formalise and build on existing triangular cooperation initiatives, which would test the potential for inter-agency trust and learning. Although these areas are narrow, they are concrete ways of taking the first steps towards broader donor collaboration. Copyright © 2011 John Wiley & Sons, Ltd.

The Return of Non‐DAC Donors to Africa: New Prospects for African Development?

This article examines the consequences of the return to Africa of donors that are not members of the OECD's Development Assistance Committee (DAC). It categorises these donors according to form, content, size and modality of their aid. It finds that their return increases external financial flows, in particular to countries not targeted by DAC donors. Moreover, for some donors like China and India the flows are closely related to other financial flow s such as trade and investment. Furthermore, it finds that the return of non‐DAC donors may conflict with plans to harmonise aid and may simultaneously raise transaction costs for recipients.