Donor Funding of Multilateral Aid Agencies: Determining Factors and Revealed Burden Sharing

摘要

This study endeavours to provide an understanding of the principal sources of funding of multilateral development aid agencies, by empirically identifying the determinants' of DAC members' relative share in their funding. This is a topic that has hardly been addressed in the existing empirical literature. Our empirical analysis is based on annual data over 1970-2000, pooled across the 22 DAC donor countries. We devise and specify a burden-sharing equation for each donor's share in the total ODA receipts of each agency as well as in all the multilateral aid agencies combined. We do this in order to test for the validity of the so-called exploitation hypothesis as well as for a number of other domestic economic and political factors specific to each donor. Results obtained from this analysis indicated that donor capacity-to-pay is a highly significant determinant of burden sharing. There was some evidence of reverse exploitation, with smaller DAC donors carrying a disproportionately high burden share. Other results indicate, among others, that EU donor support for the EC agencies crowds-out support for UN agencies and a tendency for right-wing governments to provide less support for the UN. Our study has attempted to shed light on factors likely to affect relative burden sharing and donor support for the budget and operations of the multilateral development agencies. Given the current trends in factors like donor country per capita income levels, fiscal situation, ideological leaning of the political party in power, and so on, what these portend for future financial support and burden sharing among the donors can be inferred. However, given the rather pioneering and exploratory nature of the present study, a more detailed and disaggregated analysis of some of these agencies was not undertaken. Neither was a very elaborate model specific to each type of multilateral agency built, as we chose instead to simply adapt the existing generalised public goods model framework. While the analysis undertaken was adequate for achieving the objectives of the study, we hope and recommend that future studies take up additional exploration of some of these issues.