Three Essays on the Effect of Emerging Donors driven Competition on Aid Effectiveness and its Causal Mechanism

Abstract

This dissertation is composed of three essays with topics related to the effect of emerging donors driven competition on aid effectiveness. The first essay examines the effect of donor competition on the sector-level aid effectiveness. The level of aid fragmentation is employed to measure the level of donor competition. By including two explanatory variables – the general donor competition level, and the donor competition caused by emerging donors - the effect of the overall donor competition as well as the emerging donors driven competition are examined to provide the sector-level implications. The second essay accounts for the changes in the aid allocation behavior of traditional DAC donors in response to the general donor competition as well as to the emerging donors driven competition. Besides identifying the behavioral changes of traditional donors, the mediation effect of such changed behavior on aid effectiveness is analyzed with causal mediation analysis. Lastly, the third essay qualitatively analyzes the recipient perspective on the rising donor competition in the foreign aid field. By applying Theory Based Evaluation method, the analysis is carried out in focus of the increased ownership of recipients with the increase of donor competition. While each essay has its own implications, the three essays as a whole aimed to provide an overarching explication of the relationship between donor competition (especially the one led by emerging donors) and aid effectiveness.