NDLI: Reputation concerns in aid conditionality

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The Review of International Organizations : Volume 2

The Review of International Organizations : Volume 1

Reputation concerns in aid conditionality

Content Provider	Springer Nature Link
Author	Berlinschi, Ruxanda
Copyright Year	2010
Abstract	This paper analyzes the conditions under which reputation concerns induce donors and recipients to respect conditional aid contracts. Donors enforce conditionality if the benefits of improving compliance in future contracts thanks to a tougher reputation exceed the costs of resisting disbursement pressure. The level of conditionality enforcement is optimal if all the costs and benefits of reputation building are internalized by the decision maker. This condition is not satisfied at the World Bank and the IMF, where enforcement is decentralized to country departments which do not internalize the benefits of a tough reputation on other departments. Recipients comply with conditionality if the costs of implementing conditionality are lower than the benefits of securing tranche release thanks to compliance and obtaining future contracts thanks to a good reputation for compliance. Reputation concerns increase recipients’ incentives to comply only if there is some uncertainty on future aid commitments, which is true for successive single-tranche contracts, but not for multi-tranche contracts.
Starting Page	433
Ending Page	459
Page Count	27
File Format	PDF
ISSN	15597431
Journal	The Review of International Organizations
Volume Number	5
Issue Number	4
e-ISSN	1559744X
Language	English
Publisher	Springer US
Publisher Date	2010-03-16
Publisher Place	Boston
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Conditionality enforcement Reputation Economics general Political Science Social Sciences
Content Type	Text
Resource Type	Article
Subject	Political Science and International Relations Economics and Econometrics Organizational Behavior and Human Resource Management

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