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Delegation of implementation in project aid.

Silvia Marchesi1,2, Tania Masi1

  • 1Department of Economics, University of Milano Bicocca, Piazza dell'Ateneo Nuovo 1, Milano, I-20126 Italy.

The Review of International Organizations
|April 16, 2024
PubMed
Summary

Project aid implementation is influenced by transparency. Lower transparency increases local project implementation, but local agencies only improve success rates up to a certain transparency threshold.

Keywords:
DelegationForeign aidTransparencyWorld Bank projects

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Area of Science:

  • Development Economics
  • Public Administration
  • International Relations

Background:

  • Delegation of implementation in project aid is crucial for effective development assistance.
  • Informational asymmetry between national and local government levels can significantly impact aid effectiveness.
  • Understanding the drivers and consequences of implementation choices is vital for optimizing project outcomes.

Purpose of the Study:

  • To empirically assess the influence of informational asymmetry on the delegation of project aid implementation.
  • To investigate whether the choice of local versus national implementation affects project performance.
  • To analyze the role of transparency in the delegation of project aid implementation.

Main Methods:

  • Analysis of over 5800 World Bank projects data from 1995-2014.
  • Econometric assessment controlling for country-level and project-level characteristics.
  • Quantification of the impact of transparency on the probability of local implementation.

Main Results:

  • A one standard deviation decrease in transparency increases the probability of local project implementation by three percentage points.
  • Transparency significantly influences the choice between local and national implementation of aid projects.
  • Local implementation enhances project success probability, but only up to a certain level of national transparency.

Conclusions:

  • Transparency is a key factor in determining the level of implementation delegation in project aid.
  • The effectiveness of local implementation agencies is contingent on the recipient country's transparency levels.
  • Policy interventions should consider transparency as a critical element in designing and implementing development projects.