1. Aid Allocation and Practice: Multilateral Organizations
International Development Cooperation:
Theory & Practice
SNU GSIS
Aid Allocation and Practice:
Multilateral Organizations

2. Multilateral Aid: How much?

3. Multilateral Aid: How much?

4. Multilateral Aid: by bilateral donors

5. Multilateral Aid: by bilateral donors

6. Trends and Issues Multilateral ODA about 30%
Multilateral ODA not been increased as much as ODA
Total use of multilateral system including multi-bi ODA is about 40%
Non-core(multi-bi) aid on the rise
Non-DAC share is reported about 22% (2010)
Multilateral organizations to broaden funding source to middle-income countries and private foundations
Proliferation of aid agencies: over 210 major organizations and funds, trust funds, etc.
Bilateral donor’s domestic concerns
accountability and control
balance between bilateral and multilateral allocations?

7. Multilateral Development Agencies: UN
Assessed contributions vs voluntary core contributions
More than 40 UN agencies for development purpose

8. Why Multilateral Organizations?
Advantages of multilateral system (OECD DAC)
Appropriate vehicle for tackling global issues because of political legitimacy
Broader technical base than individual bilateral donors
Economies of scale
The role of aid agencies (Martens 2005)
To reduce transaction costs: ex-ante costs & ex-post uncertainties
To mediate preferences between donor and recipient
Multilateral agencies
collective action: minimize risks and strengthen legitimacy and credibility of unpopular programmes
Economies of scale of scope in knowledge production
Benefits for donors and recipients?

9. Aid allocation by Multilateral Agencies
The Determinants of Aid Allocation by Regional Multilateral Development Banks and United Nations Agencies (Neumayer 2003)
4 MDBs and 3 UN agencies,
DV: share of total amount allocated in recipient
Regressors
population
per capita income
Physical Quality of Life Index (PQLI)
colony experience
distance from major bilateral donors
political freedom
integrity rights
military expenditure
arms import
low corruption

10. Determinants of aid allocation by MOs (1)
Aggregate Multilateral Aid

11. Determinants of aid allocation by MOs (2)
By individual agencies: UNDP and UNICEF
UNICEF

12. Q & A