Development Assistance and Policy Transfer: An Empirical Analysis of Korea's Knowledge Sharing Program (KSP)

Abstract

Since its appearance toward the end of the twentieth century, the practice of policy transfer and knowledge sharing as a type of development aid has been increasing. However, the environment in which policy transfer and knowledge sharing are able to create meaningful policy outcomes has yet to be verified fully. To this purpose, this paper conducts an analysis of the policy environment and inherent project characteristics of Koreas Knowledge Sharing Program (KSP) to identify the factors that affect the adoption of KSP policy recommendations as recipient countries development policies. In particular, this paper focuses especially on the effects of factors related to volumes of official development assistance (ODA), to find out whether the adverse effects of aid dependency previously present in traditional development aid programs also appear in policy transfer and knowledge sharing types of development assistance. Initiated in 2004, the Knowledge Sharing Program has become an integral part of Koreas ODA policy. The analyses in this paper draws upon panel data for 318 KSP projects implemented between 2004 and 2013, in the 15 countries for which follow-up studies have been carried out. To identify the factors that have influenced policy adoption in the case of the KSP, logistic regression type analyses were conducted based on a dataset with variables indicating the outcome results of individual projects, country characteristics, and project characteristics of each KSP project. The analyses found that aid related ratios such as ODA/GNI ratios, ODA/central government expense ratios, and ODA/gross capital formation ratios decreased the probability of KSP policy recommendations being adopted as policy. On the other hand, the ratios of the volume of Korean ODA to net ODA volumes increased the probability of the adoption of KSP policy recommendations. Still other country and project characteristics variables, such as democracy levels, the managing agency of the project, the continuing status of the recipient partner country, priority partner status, and the country effect were also found to be statistically significant in their effects on the adoption of KSP policy recommendations as proper policy in the recipient partner countries. The interpretations and policy implications based on the above results are expected to provide some meaning for better policy recommendations and their adoption in future implementation of policy transfer and knowledge sharing types of aid.