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Empirical Evidence on Development Effectiveness: From Macroeconomic Structures to Micro-Level Implementation

Richert, Katharina

German Title: Empirische Evidenz zur Wirksamkeit von Entwicklungszusammenarbeit: Von makroökonomischen Strukturen zur Implementierung auf mikroökonomischer Ebene

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Abstract

CHAPTER 1 It has been intensively and controversially discussed whether ‘good’ economic policies and governance in the recipient countries render foreign aid more effective in alleviating poverty and stimulating economic growth. By contrast, the question of whether aid recipient countries would benefit from stronger income effects if foreign donors provided higher quality aid has received scant attention so far. In Chapter 1, we make use of the index of donor performance from the Center for Global Development to compare the effects of quality-adjusted aid and unadjusted aid on changes in GDP per capita. Our difference-in-differences analysis reveals significant and quantitatively important treatment effects for quality-adjusted aid after the introduction of the Paris Declaration on Aid Effectiveness in 2005, while we do not find significant treatment effects for unadjusted aid. This implies that only recipient countries with increased aid inflows of high quality benefit in terms of increasing GDP per capita. The quality of aid matters most when accounting for delayed effects. However, our results depend on the sample of recipient countries. CHAPTER 2 Over 300 government members have had the main responsibility for international development cooperation in 23 member countries of the OECD’s Development Assistance Committee since the organization started reporting detailed ODA data in 1967. Understanding their role in foreign aid giving is crucial since their decisions can influence aid effectiveness and thus economic development on the ground. Chapter 2 examines whether development ministers’ personal characteristics are associated with aid budgets and aid quality. To this end, we create a novel database on development ministers’ gender, political ideology, prior professional experience in development cooperation, education, and time in office over the 1967-2012 period. Results from fixed-effects panel regressions show that some of the personal characteristics of development ministers matter. Most notably, we find that more experienced ministers with respect to their time in the development office obtain larger aid budgets. Moreover, our results suggest that female ministers as well as officeholders with prior professional experience in development cooperation and a longer time in office provide higher-quality ODA. CHAPTER 3 The bulk of IFC lending benefits companies from rich countries, and projects in countries with middle income. Large conglomerates such as Lidl or Mövenpick have been among its direct beneficiaries. This contrasts to some extent with the IFC’s official mandate, which is to finance poverty-reducing projects for which private capital is not available on reasonable terms. In Chapter 3, we investigate the drivers of this mismatch. According to our theory, the governments of industrialized countries where borrowing companies are based form coalitions with governments of middle-income countries where the projects are implemented. We therefore expect preferential treatment to be most pronounced when the representatives of both the recipient’s and the company’s countries are best able to collude in exerting their influence. We argue that this will be the case when both countries’ governments are represented among the IFC’s Board of Executive Directors, and when they have extraordinary clout with major IFC shareholders. Using data for more than 3,000 IFC projects over the 1995-2015 period we show that the (joint) influence of these countries helps them to receive a disproportional share of IFC funding. CHAPTER 4 The success of development interventions crucially depends on their uptake in the targeted population. We investigate incentives for uptake of those interventions, making use of a framework grounded in psychological theory, “The Theory of Planned Behavior”. The framework suggests three determinants for intervention uptake: personal attitudes, the social influence of important others and the perceived ease of intervention use. We use the setup of two randomized controlled trials in Indonesia and Pakistan to test the theory for development intervention purposes. Our findings show that the proposed determinants are indeed associated with increased uptake. We investigate further on the determinant personal attitudes, which is most relevant to our intervention, by conducting a framed field experiment in Indonesia. The experiment shows that the study population in the Indonesian context exhibits higher levels of support for the project if the participation of international actors is highlighted. Consequently, our results encourage international research and development cooperation, first, to consider the determinants suggested by the “Theory of Planned Behavior” in the design of projects in order to increase intervention uptake. Second, depending on the country context, explicitly framing international participation in the conducted project might be a cost-effective way to increase supportive behavior towards the intervention. CHAPTER 5 This chapter assesses the impact of impact evaluations based on impact evaluation studies in developmental health interventions, collected through the International Initiative for Impact Evaluation’s repository. Considering the steady increase in impact evaluations and financial resources already spent, policy and research are demanding evidence on whether the growing effort indeed leads to learning, improved projects and finally, improved outcomes. I analyze this empirical question for the period 1995-2014 in a cross-country panel for general health outcomes and at a sub-national level for the country Uganda with regard to infant mortality rates per districts. Results are very robust and show a significant correlation between impact evaluations in health and improved outcomes on a cross-country level. Based on more precise data measurement and linkages, also sub-national findings indicate that impact evaluations in maternal and neonatal health conditional on increased corresponding ODA disbursements lead to reduced infant mortality.

Item Type: Dissertation
Supervisor: Dreher, Prof. Dr. Axel
Place of Publication: Heidelberg, Deutschland
Date of thesis defense: 24 September 2018
Date Deposited: 11 Mar 2019 09:31
Date: 2019
Faculties / Institutes: The Faculty of Economics and Social Studies > Alfred-Weber-Institut for Economics
Subjects: 300 Social sciences
330 Economics
Controlled Keywords: Development Effectiveness, Entwicklungszusammenarbeit, Impact Evaluation
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