Single title

How do traditional donors respond when beneficiary countries set up their own aid agencies?

by Christina Teichmann

Case Studies of India, Brazil and South Africa

The creation of dedicated aid agencies in emerging donor countries is a relatively new feature. Since many of these emerging donors are also recipients of Official Development Assistance, this institutionalization and professionalization of their development assistance raises some difficult questions.How do traditional donors perceive this new development in beneficiary countries and how do they respond to it in terms of aid allocations and co-operation arrangements? These are the fundamental questions that this research paper which forms part of a Master thesis aims to address.

ABSTRACT:

Emerging donors, such as India, Brazil and South Africa, have provided assistance to other developing countries for many decades. However, the creation of dedicated aid agencies in emerging donor countries is a relatively new feature. The establishment of these aid agencies is often motivated by the objective of better coordinating and managing the increasing volume and scope of their development assistance activities.

Since many of these emerging donors are also recipients of Official Development Assistance (ODA) from traditional donors, this institutionalization and professionalization of their development assistance raises some difficult questions. How do traditional donors perceive this new development in beneficiary countries and how do they respond to it in terms of aid allocations and co-operation arrangements? Do traditional donors still perceive beneficiary countries that are in a position to provide development assistance to other countries as being eligible to receive aid? These are the fundamental questions that this research study aims to answer.

This research study is based on the hypothesis that the creation of dedicated aid agencies in beneficiary countries prompts traditional donors to either freeze, reduce or terminate ODA and rethink their development cooperation strategies. It argues that traditional donors perceive beneficiary countries with dedicated aid agencies as no longer in need of foreign assistance. In order to test this hypothesis and identify changes in the flow of aid, the research study compares official aid flow data for five selected traditional donors (France, Germany, the UK, the US and EU Institutions) to three emerging donor countries (India, Brazil and South Africa) before and after the establishment of dedicated aid agencies.

The research further investigates whether other factors, such as beneficiary countries' socio-economic performance and compliance with DAC norms and standards, play a role in traditional donors' aid allocation decisions. Alongside the quantitative analysis, the research uses semi-structured elite interviews with representatives of the five traditional donors as well as development cooperation experts to solicit qualitative responses.

Please note that the views expressed in this paper are the author's views and are not necessarily shared by the Konrad-Adenauer-Stiftung.

Contact Person

Christina Teichmann