slide title 70 pt capitals slide subtitle minimum 30 pt concentration difficulties: an analysis of...
TRANSCRIPT
Concentration difficulties: An analysis
of Swedish aid proliferation
#ebaseminar
RUNE JANSEN HAGENUNIVERSITY OF BERGEN
EBA-SEMINAR AUGUST 20 , 2015
Concentration difficulties? An analysis of Swedish aid
proliferation
Overview
BackgroundWhy is aid dispersion a problem?Measuring aid dispersionAid dispersion: The case of SwedenSelectivity in concentrationCoordination vs. Cooperation in aidConclusions
Background
High level (Paris) agenda on aid effectiveness Many sensible ideas Implementation disappointing And new emphasis on development effectiveness, which is
unlikely to improve the recordMajor item on that agenda: aid dispersion too highTwo ways of reducing costs of aid dispersion
Unilateral (e.g. concentration policies of Sweden and others) Simple and lowers costs for both donors and recipients
Joint action: coordination vs. Cooperation Coordination costly and becoming costlier with entry of new
actors
Why is aid dispersion a problem?
Transaction costs Resources absorbed in planning, monitoring, reporting,
and evaluating performance in aid-financed activitiesIncentive problems
Free-riding in provision of collective goods and excessive use of common pool resources
Transaction costs and inefficiencies caused by incentive problems hard to measure
Aid dispersion can be measured and donors have committed to reducing it Fragmentation lowers growth in recipients
Measuring aid dispersion
Many measures in literature, some ad-hocTheil index has well-known propertiesAnd a major advantage: it is decomposable
Total Theil = Between Theil + Within Theil Between Theil: across partner countries Within Theil: across sectors within recipients
Note 1: inequality measure; measures concentration
Note 2: normalised to 0 (lowest) – 1 (highest) Note 3: first time property applied to aid data
Number of recipients
Sweden: Number of recipients up over 2007-2013
Total Theil, Sweden, full sample
2007: Policy change
0
.1
.2
.3
.4
.5
1998 2003 2008 2013Years
Overall Between Within
Source: Author's calculations
Improvement 2007-09 due to between; slippage post 2009; overall no change 07-13
Restricted samples, Sweden
2007: Policy change
0
.1
.2
.3
.4
.5
1998 2003 2008 2013Years
Overall Between Within
Source: Author's calculations
2007: Policy change
0
.1
.2
.3
.4
.5
.6
1998 2003 2008 2013Years
Overall Between Within
Source: Author's calculations
Only large commitments (left),NGOs excluded (below)
Concentration higher, both sub-samples:Small commitments, aid through NGOs more dispersedImprovement 2007-13, due to betweenHigher dispersion after 2009
Selectivity in concentration: the argument
Ineligible due to high incomes
Ineligible due to low institutional quality
Eligible, selected as potential partners because of higher than expected institutional quality
Eligible, but not selected as institutional quality is lower than expected
Estimated relationship between institutional quality and income
Income level Z
X
Inst
itut
iona
l qua
lity
• Institutions matter for long-run development• Policies can ignite growth, but good institutions needed to sustain it• The «right» institutions and policies are country-specific• Different approaches needed in different partner countries• Medium-term, country-specific selectivity using mainly budget support
can incentivise elites, reduce herding, and lower transaction costs
Swedish selectivity 1: Focus countries
0
50
100
Pe
rcen
t
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Source: Author's calculations
Focus countries Other countries
Swedish selectivity 2: Income & governance
0
50
100
Pe
rcen
t
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Source: Author's calculations
Low Income Countries Middle Income Countries
0
.1
.2
.3
1998 2003 2008 2013Years
Source: Author's calculations
Income (left) and governance (below)
Share of Swedish aid to countries in upper 25percentil of average WGI-indicator
Cooperation vs. coordination
“Coordination is important because so little cooperation takes place. Large numbers of donors, each doing their own thing in developing countries, give rise to a need for coordination to ensure that all of these activities take place in harmony.” Woods (2011, p. 118)
Little evidence of Sweden contributing to an improved division of labour among donors Overlap in activities increasing
Continuous entry of new actors implies coordination costs will increase, arguably making multilateral aid best complement to unilateral action Sweden’s multilateral aid share average as commonly defined
Conclusions
Sweden has made international commitments to reducing aid dispersion and adopted its own concentration policy in 2007
Succeeded 2007-2009, slippage afterwardsOverall dispersion only lower at sample end if
small transactions or NGOs left outOriginal guidelines no tool for achieving
concentration and current aid policy framework does not even mention it
Political economy of aid implies policy should be transparent and institutionalised
Commitments, Sweden
0
500
1000
1500
No
of n
ew c
om
mitm
ents
0
1
2
Ave
rag
e co
mm
itme
ntsi
ze in
US
do
llar
mill
ion
s
1998 2003 2008 2013Years
Commitment size No of new commitments
Source: Author's calculations
Commitments, DAC
0
25000
50000
75000
Tot
al n
o of
new
co
mm
itmen
ts
0
1
2
Ave
rag
e co
mm
itme
ntsi
ze in
US
do
llar
mill
ion
s
1998 2003 2008 2013Years
Commitmentsize No of new commitments
Source: Author's calculations
Total Theil, Sweden and comparators
0
.2
.4
.6
1998 2003 2008 2013Years
Norway Denmark United KingdomDAC-donors Sweden
Source: Author's calculations
Between-component of Theil
0
.1
.2
.3
.4
1998 2003 2008 2013Years
Norway Denmark United KingdomDAC-donors Sweden
Source: Author's calculations
Within-component of Theil
0
.1
.2
.3
.4
1998 2003 2008 2013Years
Norway Denmark United KingdomDAC-donors Sweden
Source: Author's calculations
Number of recipients, large commitments
2007:Policy change
0
50
100
1998 2003 2008 2013Years
Norway Denmark United KingdomDAC-donors Sweden
Source: Author's calculations
Sweden, commitments over 500 000 USD
0
100
200
300
400
No
of n
ew c
om
mitm
ents
0
1
2
3
4
5
Ave
rag
e co
mm
itme
ntsi
ze in
US
do
llar
mill
ion
s
1998 2003 2008 2013Years
Commitmentsize No of new commitments
Source: Author's calculations
Theil, commitments over 500 000 USD
0
.2
.4
.6
1998 2003 2008 2013Years
Norway Denmark United KingdomDAC-donors Sweden
Source: Author's calculations
Number of recipient countries, excluding NGOs
2007:Policy change
0
50
100
150
1998 2003 2008 2013Years
Norway Denmark United KingdomDAC-donors Sweden
Source: Author's calculations
Commitments Sweden, NGOs excluded
0
200
400
600
800
1000
No
of n
ew c
om
mitm
ents
0
1
2
3
4A
vera
ge
com
mitm
ent
size
in U
S d
olla
r m
illio
ns
1998 2003 2008 2013Years
Commitmentsize No of new commitments
Source: Author's calculations
Theil, NGOs excluded
0
.2
.4
.6
1998 2003 2008 2013Years
Norway Denmark United KingdomDAC-donors Sweden
Source: Author's calculations
2007: policy change
Theil Sweden with and w.o. 3 yrs moving average
2007: Policy change
0
.1
.2
.3
.4
.5
1998 2003 2008 2013Years
Overall MA Between MA Within MAOverall Between Within
Source: Author's calculations
Overlap in activities among donors
0
.1
.2
1998 2003 2008 2013Years
Norway Denmark United KingdomDAC-donors Sweden
Source: Author's calculations
Average bilateral overlap with other DAC donors: 0 (lowest) – 1 (highest)
Average bilateral overlap for Sweden, 1998-2013
Donor Overlap
Korea 0.016
Japan 0.052
France 0.068
Australia 0.071
Austria 0.086
Spain 0.105
Italy 0.107
Belgium 0.115
Germany 0.128
Denmark 0.142
USA 0.144
Canada 0.144
Switzerland 0.145
United Kingdom 0.150
Ireland 0.164
Finland 0.172
Netherlands 0.206
Norway 0.241
Overlap, commitments over 500 000 USD
0
.1
.2
1998 2003 2008 2013Years
Norway Denmark United KingdomDAC-donors Sweden
Source: Author's calculations
Overlap, excluding NGO-transactions
0
.1
.2
1998 2003 2008 2013Years
Norway Denmark United KingdomDAC-donors Sweden
Source: Author's calculations
Donors included and excluded from sample
Included Excluded (less than 1% of total observations)
Australia Czech Republic
Austria Greece
Belgium Iceland
Canada Luxembourg
Denmark New Zealand
Finland Portugal
France Slovenia
Germany United Arab Emirates
Ireland
Italy
Japan
Korea
Netherlands
Norway
Spain
Sweden
Switzerland
United Kingdom
United States
Sectors in sample
DAC5 code
SectorNumber of
observations110 Education 128,293
120 Health 59,920
130Population policies/programmes and reproductive
health28,622
140 Water and sanitation 29,905
150 Government and civil society 145,768
160 Other social infrastructure and services 64,085
210 Transport and storage 11,929
220 Communications 14,949
230 Energy generation and supply 13,218
240 Banking and financial services 9,472
250 Business and other services 12,009
310 Agriculture, forestry, fishing 64,632
320 Industry, mineral resources and mining, construction 23,302
330Trade policy and regulations and trade-related
adjustment, Tourism11,727
410 General environmental protection 31,025
430 Other multisector 77,124
510 General budget support 1,739
520 Developmental food aid/Food security assistance 20,235
530 Other commodity assistance 436
600 Action relating to debt 4,566
Total 752,956
Sectors excluded from sample
DAC5 code
Sector No of observations
720 VIII.1. Emergency Response 85,727
730 VIII.2. Reconstruction Relief & Rehabilitation 7,931
740 VIII.3. Disaster Prevention & Preparedness 5,070
910 Administrative Costs of Donors 12,297
930 Refugees in Donor Countries 5,654
998 IX. Unallocated / Unspecified 121,954
Theil Formula
Kommentarer
Eva Lithman
Paneldiskussion
Gun-Britt Andersson
Hanna Hellquist
Staffan Herrström