2004年-世界发展银行全球_Aid_Agency_Competition___A_Century_of_Entry_But_No_Exit_4页_158kb

Aid Agency Competition Summary

Core Content

This document explores the evolution of the aid industry over the past century, focusing on the increasing competition among aid agencies and donor countries. It discusses the implications of this competition for the efficiency and effectiveness of the aid system and proposes potential strategies to leverage it for better development outcomes.

Main Points

• Aid Industry Overview: The aid industry has seen a steady influx of new agencies since the postwar period, with the most notable being the U.S. Agency for International Development (USAID), the Bretton Woods institutions, and others like the European Bank for Reconstruction and Development (EBRD) and the Millennium Challenge Corporation (MCC).
• Concentration vs. Competition: While the aid industry has historically been concentrated, especially in the 1950s, it has become increasingly competitive. The Herfindahl index, which measures market concentration, has dropped from over 0.5 in the 1950s to around 0.1 today, indicating a more fragmented and competitive environment.
• Bilateral Donor Competition: Donor countries are not only establishing new agencies but also competing with each other by shifting aid to different regions and countries. This trend has led to more aid being dispersed across recipients, reducing the dominance of any single donor.
• Recipient Country Impact: Recipient countries now receive aid from more donors, increasing donor fragmentation. However, this fragmentation is not always beneficial, as it may lead to lower-quality bureaucracies due to competition for local talent.
• World Bank Group's Decline: The World Bank Group, particularly the International Bank for Reconstruction and Development (IBRD), has seen a decline in market share over the past three decades, especially since the mid-1980s.

Key Information

• Herfindahl Index: A tool used to measure market concentration, with a lower index indicating higher competition. The aid industry's index has dropped significantly over time, suggesting greater competition.
• Donor Fragmentation: The World Bank's index shows that the average number of donors per country increased from 56 in 1975 to 67 in 2002, indicating more donor involvement.
• Market Segmentation: Donors are spreading their aid more widely, reducing the segmentation of the aid market and creating more opportunities for competition.
• Strategies for Managing Competition: The document suggests that competition can be harnessed by improving monitoring and benchmarking of aid agencies. It also explores the possibility of splitting existing agencies or outsourcing aid delivery to more efficient execution agencies.
• Aid Vouchers: The idea of giving aid vouchers to poor people to allow them to purchase services directly is mentioned, though it faces significant economic and political challenges.

Conclusion and Recommendations

• Competition in Aid: The aid industry is becoming more competitive, which is a positive trend for recipients as it can drive innovation and efficiency.
• Quasi-Market Dynamics: While the aid system is not a true market, the principles of competition can still be applied to improve outcomes.
• Need for Innovation: The document emphasizes the need for the aid industry to innovate and adapt to the growing competition, potentially by improving transparency, performance monitoring, and exploring new models of aid delivery.

References

• Easterly, William. 2002. "The Cartel of Good Intentions." Foreign Policy (July-August): 40-49.
• Knack, Stephen, and Aminur Rahman. 2004. "Donor Fragmentation and Bureaucratic Quality in Aid Recipients." Policy Research Working Paper 3186. World Bank, Development Research Group, Washington, D.C.
• Verleger, P. K. 1993. Adjusting to Volatile Energy Prices. Washington, D.C.: Institute for International Economics.
• World Bank. 2004. Global Monitoring Report 2004: Policies and Actions for Achieving the Millennium Development Goals and Related Outcomes. Washington, D.C.

Notes

• The Herfindahl index is the sum of the squares of the market shares of industry players.
• The term "multilateral aid agencies" includes the World Bank Group, the United Nations, regional development banks, and the European Commission.
• The trend of increased competition is reflected in the titles of papers presented to the Bank-Fund Development Committee, which increasingly focus on partnership, joint programs, and harmonization.