The impact of domestic political constraints on World Bank project lending

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" The impact of domestic political constraints on World Bank project lending "
Matthew S. Winters P. Pinto

Document Type	:	Latin Dissertation
Language of Document	:	English
Record Number	:	55660
Doc. No	:	TL25614
Call number	:	‭3373580‬
Main Entry	:	Matthew S. Winters
Title & Author	:	The impact of domestic political constraints on World Bank project lending\ Matthew S. Winters
College	:	Columbia University
Date	:	2009
Degree	:	Ph.D.
student score	:	2009
Page No	:	197-n/a
Abstract	:	This dissertation comprises three papers on foreign aid and governance. The first starts from the idea that international donors are often unable to sanction national governments that do not implement aid programs as agreed. It asks under what conditions aid is likely to reach its intended destination, arguing that targeting aid at groups with a greater capacity for collective action is one possible mechanism to insure aid delivery. The second examines one World Bank project in Indonesia and assesses the extent to which the government faithfully implemented the targeting criteria of that program. The data indicate that the government was-more likely to select deserving villages for the program if those villages also had a certain capacity for collective action. The third examines whether or not the World Bank designs aid projects conditional on the governance characteristics of a country. I find some support for more well-governed countries being more likely to receive nationwide investment project loans, the types of loans of which good-governance countries should be able to make better developmental use. A theory of aid targeting and capture. Given incentives to have as much budgetary freedom as possible, governments may be interested in capturing multilateral aid donations for their preferred uses. And while multilateral donors may withdraw funds from a country, they have a disincentive to do so because they want those funds to reach impoverished populations in need of assistance. Under certain conditions where these targeted populations are willing to and have the capacity to protest against being short-changed by their own government, however, domestic interest groups may constrain the government's ability to capture donor funds. Using a formal model, this paper demonstrates that such constraints theoretically can check the government's desire to capture international aid for itself. The model also reveals unexpected consequences for increasing protest costs and a credible commitment problem possibly faced by social groups at which donors target aid. An extension examines the behavior of a strategic donor. I conclude the paper with a list, of empirical implications. An analysis of the selection of participants for a water supply program in Indonesia. Whether foreign aid reaches its intended recipients is a pressing question for international donors. The World Bank-funded Second Water and Sanitation for Low Income Communities (WSLIC-2) project in Indonesia is supposed to provide funding to poor, rural villages where large numbers of people are not served by acceptable water systems or where there is high prevalence of water-related diseases. The process by which villages are chosen for the program, however, leaves some room open for political manipulation at the district level. This chapter explores whether or not such manipulation occurred and whether or not the program served the most deserving villages. Because of a complicated data-generating process that induces spatio-political correlation, the analysis requires the use of a multilevel model. The analysis finds that socio-political variables beyond the stated program criteria predict selection into WSLIC-2 with some substantive effects as large as those of the stated program criteria. These socio-political variables are most relevant, at the sub-district level, suggesting political coordination among villages within sub-districts. Choosing to target: What types of countries get different types of World Bank programs. Using an original dataset Of all World Bank projects from 1996 to 2002. I distinguish between projects that are targeted sub-nationally from those that are nationwide. I also distinguish investment projects from programmatic aid. Then I look to see which national characteristics predict the use of programmatic aid and national project aid by the World Bank. The main hypothesis is that, if the World Bank acts strategically, then it will choose to use programmatic and national aid in countries with better governance. This is because untargeted aid is less likely to be subject to capture and corruption in well-governed countries. The evidence reveals that countries with better governance are more likely to receive national investment projects. I also confirm the finding that good governance increases the size of overall World Bank aid flows. However. I do not find evidence of an effect with regard to programmatic aid versus investment project aid.
Subject	:	Social sciences; Foreign aid; Aid effectiveness; World Bank; Targeting; Development; Corruption; Political science; Global economy; Banks; Government; 0615:Political science
Added Entry	:	P. Pinto
Added Entry	:	Columbia University