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EENIE, MEENIE, MINEY, MOE?INSTITUTIONAL PORTFOLIOS AND DELEGATION TO
MULTILATERAL AID INSTITUTIONS
Christina J. Schneider and Jennifer L. Tobin
UCSD and Georgetown University
Presentation at International Political Economy SocietyNovember, 2010
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DELEGATION TO MULTILATERAL AID INSTITUTIONS
20
040
060
080
010
00
De
lega
tion (
in b
n. co
nsta
nt U
S$)
1970 1975 1980 1985 1990 1995 2000 2005Year
(measured in billions of constant (2007) U.S. dollars)
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THE DELEGATION PUZZLE
Delegation . . .increases the overall value of development aid
I MAI efficiency (Collier et al. 2001)I Burden-sharing (Milner/Tingley (various) 2010)
decreases the control over aid allocationI Agent slippage (Nielson/Tierney 2003; Hawkins et al.
2006)I Distributional conflicts (Copelovitch 2010;
Schneider/Tobin 2010)
⇒ Efficiency gains valuable only if MAI policies similar togovernment’s allocation preferences⇒Why do states delegate?
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THE DELEGATION PUZZLE
Delegation . . .increases the overall value of development aid
I MAI efficiency (Collier et al. 2001)I Burden-sharing (Milner/Tingley (various) 2010)
decreases the control over aid allocationI Agent slippage (Nielson/Tierney 2003; Hawkins et al.
2006)I Distributional conflicts (Copelovitch 2010;
Schneider/Tobin 2010)
⇒ Efficiency gains valuable only if MAI policies similar togovernment’s allocation preferences⇒Why do states delegate?
![Page 5: Christina J. Schneider and Jennifer L. Tobin · Christina J. Schneider and Jennifer L. Tobin ... Political Economy Society November, 2010. DELEGATION TO MULTILATERAL AID INSTITUTIONS](https://reader033.vdocuments.net/reader033/viewer/2022050513/5f9d7ef7a755f7321c7c2c89/html5/thumbnails/5.jpg)
THE DELEGATION PUZZLE
Delegation . . .increases the overall value of development aid
I MAI efficiency (Collier et al. 2001)I Burden-sharing (Milner/Tingley (various) 2010)
decreases the control over aid allocationI Agent slippage (Nielson/Tierney 2003; Hawkins et al.
2006)I Distributional conflicts (Copelovitch 2010;
Schneider/Tobin 2010)
⇒ Efficiency gains valuable only if MAI policies similar togovernment’s allocation preferences⇒Why do states delegate?
![Page 6: Christina J. Schneider and Jennifer L. Tobin · Christina J. Schneider and Jennifer L. Tobin ... Political Economy Society November, 2010. DELEGATION TO MULTILATERAL AID INSTITUTIONS](https://reader033.vdocuments.net/reader033/viewer/2022050513/5f9d7ef7a755f7321c7c2c89/html5/thumbnails/6.jpg)
THE DELEGATION PUZZLE
Delegation . . .increases the overall value of development aid
I MAI efficiency (Collier et al. 2001)I Burden-sharing (Milner/Tingley (various) 2010)
decreases the control over aid allocationI Agent slippage (Nielson/Tierney 2003; Hawkins et al.
2006)I Distributional conflicts (Copelovitch 2010;
Schneider/Tobin 2010)
⇒ Efficiency gains valuable only if MAI policies similar togovernment’s allocation preferences⇒Why do states delegate?
![Page 7: Christina J. Schneider and Jennifer L. Tobin · Christina J. Schneider and Jennifer L. Tobin ... Political Economy Society November, 2010. DELEGATION TO MULTILATERAL AID INSTITUTIONS](https://reader033.vdocuments.net/reader033/viewer/2022050513/5f9d7ef7a755f7321c7c2c89/html5/thumbnails/7.jpg)
ARGUMENT
Need to take into account institutional portfolioAbility to delegate different amounts to various MAIwith overlapping goalsInstitutional portfolio allows donors to delegate inorder to maximize
I EfficiencyI Preference similarity
⇒ Donor choice mitigates costs of delegation
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ARGUMENT
Need to take into account institutional portfolioAbility to delegate different amounts to various MAIwith overlapping goalsInstitutional portfolio allows donors to delegate inorder to maximize
I EfficiencyI Preference similarity
⇒ Donor choice mitigates costs of delegation
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ARGUMENT
Need to take into account institutional portfolioAbility to delegate different amounts to various MAIwith overlapping goalsInstitutional portfolio allows donors to delegate inorder to maximize
I EfficiencyI Preference similarity
⇒ Donor choice mitigates costs of delegation
![Page 10: Christina J. Schneider and Jennifer L. Tobin · Christina J. Schneider and Jennifer L. Tobin ... Political Economy Society November, 2010. DELEGATION TO MULTILATERAL AID INSTITUTIONS](https://reader033.vdocuments.net/reader033/viewer/2022050513/5f9d7ef7a755f7321c7c2c89/html5/thumbnails/10.jpg)
ARGUMENT
Need to take into account institutional portfolioAbility to delegate different amounts to various MAIwith overlapping goalsInstitutional portfolio allows donors to delegate inorder to maximize
I EfficiencyI Preference similarity
⇒ Donor choice mitigates costs of delegation
![Page 11: Christina J. Schneider and Jennifer L. Tobin · Christina J. Schneider and Jennifer L. Tobin ... Political Economy Society November, 2010. DELEGATION TO MULTILATERAL AID INSTITUTIONS](https://reader033.vdocuments.net/reader033/viewer/2022050513/5f9d7ef7a755f7321c7c2c89/html5/thumbnails/11.jpg)
ARGUMENT
Need to take into account institutional portfolioAbility to delegate different amounts to various MAIwith overlapping goalsInstitutional portfolio allows donors to delegate inorder to maximize
I EfficiencyI Preference similarity
⇒ Donor choice mitigates costs of delegation
![Page 12: Christina J. Schneider and Jennifer L. Tobin · Christina J. Schneider and Jennifer L. Tobin ... Political Economy Society November, 2010. DELEGATION TO MULTILATERAL AID INSTITUTIONS](https://reader033.vdocuments.net/reader033/viewer/2022050513/5f9d7ef7a755f7321c7c2c89/html5/thumbnails/12.jpg)
ARGUMENT
Need to take into account institutional portfolioAbility to delegate different amounts to various MAIwith overlapping goalsInstitutional portfolio allows donors to delegate inorder to maximize
I EfficiencyI Preference similarity
⇒ Donor choice mitigates costs of delegation
![Page 13: Christina J. Schneider and Jennifer L. Tobin · Christina J. Schneider and Jennifer L. Tobin ... Political Economy Society November, 2010. DELEGATION TO MULTILATERAL AID INSTITUTIONS](https://reader033.vdocuments.net/reader033/viewer/2022050513/5f9d7ef7a755f7321c7c2c89/html5/thumbnails/13.jpg)
ARGUMENT
Policy similarity: How well the MAI’s allocation of aidreflects the donor’s allocation preferences (needs orstrategy based)?
I Formal influenceI Bureaucratic politics
MAI efficiency: Relative ability of MAI to multiplyresources using similar inputs
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ARGUMENT
Policy similarity: How well the MAI’s allocation of aidreflects the donor’s allocation preferences (needs orstrategy based)?
I Formal influenceI Bureaucratic politics
MAI efficiency: Relative ability of MAI to multiplyresources using similar inputs
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EMPIRICAL IMPLICATIONS
1 Donors delegate a greater share of their foreign aidto MAIs that maximize policy similarity
2 Donors delegate a greater share of their foreign aidto MAIs that maximize efficiency
3 The greater policy similarity, the more important isefficiency for donor delegation choices
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EMPIRICAL IMPLICATIONS
1 Donors delegate a greater share of their foreign aidto MAIs that maximize policy similarity
2 Donors delegate a greater share of their foreign aidto MAIs that maximize efficiency
3 The greater policy similarity, the more important isefficiency for donor delegation choices
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EMPIRICAL IMPLICATIONS
1 Donors delegate a greater share of their foreign aidto MAIs that maximize policy similarity
2 Donors delegate a greater share of their foreign aidto MAIs that maximize efficiency
3 The greater policy similarity, the more important isefficiency for donor delegation choices
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RESEARCH DESIGN
Panel data on 23 OECD donors and 18 MAIs,1970-2007Dependent Variable
I MAI aid receipts (logged)I MAI aid receipts (% of total delegation)
Explanatory Variables:I Policy Similarity: Similarity of BL and ML aidI Efficiency: DEA analysis
Bunch of Control VariablesFGLS (PCSEs, AR1)Time dummies and linear time trend
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MEASURING THE MAIN IVS
Policy Similarity:
Donor Allocationi,j,t =Bilateral Aidi,j,t
Bilateral Aidi,t
MAI Allocationi,j,t =MAI Aidk,j,t
MAI Aidk,t
Policy Similarityi,k,t =N∑
j=1
|Donor Allocationi,j,t −MAI Allocationk,j,t |Nj
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MEASURING THE MAIN IVS
Efficiency:
⇒ Compare relative efficiency of MAI using efficiencyfrontier
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EMPIRICAL FINDINGS
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EMPIRICAL FINDINGS
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CONCLUSIONS
Donors decide strategically between various MAIsInstitutional portfolio and the puzzle of delegationImportant implications for design of internationalinstitutionsTo do:
I Collect better data on delegation commitmentI Address endogeneity issue
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CONCLUSIONS
Donors decide strategically between various MAIsInstitutional portfolio and the puzzle of delegationImportant implications for design of internationalinstitutionsTo do:
I Collect better data on delegation commitmentI Address endogeneity issue
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CONCLUSIONS
Donors decide strategically between various MAIsInstitutional portfolio and the puzzle of delegationImportant implications for design of internationalinstitutionsTo do:
I Collect better data on delegation commitmentI Address endogeneity issue
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CONCLUSIONS
Donors decide strategically between various MAIsInstitutional portfolio and the puzzle of delegationImportant implications for design of internationalinstitutionsTo do:
I Collect better data on delegation commitmentI Address endogeneity issue
![Page 27: Christina J. Schneider and Jennifer L. Tobin · Christina J. Schneider and Jennifer L. Tobin ... Political Economy Society November, 2010. DELEGATION TO MULTILATERAL AID INSTITUTIONS](https://reader033.vdocuments.net/reader033/viewer/2022050513/5f9d7ef7a755f7321c7c2c89/html5/thumbnails/27.jpg)
CONCLUSIONS
Donors decide strategically between various MAIsInstitutional portfolio and the puzzle of delegationImportant implications for design of internationalinstitutionsTo do:
I Collect better data on delegation commitmentI Address endogeneity issue