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Donor Competition for Aid Impact, and Aid Fragmentation

Donor Competition for Aid Impact, and Aid Fragmentation »

Volume/Issue: 2012/204

Series: IMF Working Papers

Author(s): Kurt Annen , and Luc Moers

Publisher: INTERNATIONAL MONETARY FUND

Publication Date: 01 August 2012

DOI: http://dx.doi.org/10.5089/9781475505542.001

ISBN: 9781475505542

Keywords: Aid Effectiveness, Aid Fragmentation, Donor Competition, Donor Coordination, humanitarian aid, aid coordination, foreign investment, Analysis of Collective Decision-Making: General,

This paper shows that donors that maximize relative aid impact spread their budgets across many recipient countries in a unique Nash equilibrium, explaining aid fragmentation. This equilibrium may be inefficient ev...