The Proliferation of Multilateral Funds

What are the recent trends of non-core multilateral aid ? To what extent do they threaten aid effectiveness through an increased fragmentation and proliferation of funds ?

Summary

Over the last decade, Official Development Assistance (ODA) experienced a hidden transformation. Since the late 1990s, traditional multilateral aid has been on the decline while non-core multilateral aid has been rising steadily.

Non-core multilateral aid, which includes trust funds, global programs, and joint programming, enjoys considerable popularity among bilateral donors: it allows them to earmark their contributions for specific development objectives, which provides them with more influence on aid allocation and makes ODA more visible to their national constituencies. However, non-core multilateral aid may pose severe risks for aid effectiveness.

It may replace the core contributions to multilateral aid institutions (MAIs), complicate the budgeting of these organisations, inflate administrative costs and governance structures due to additional reporting, relinquish the expert knowledge of experienced MAI staff, and attract their attention for shopping for funds.

From the perspective of recipients, non-core multilateral aid undermines developing country ownership and tends to make aid flows less predictable. The rise of non-core multilateral aid may threaten aid effectiveness through an increased fragmentation and proliferation of funds. This would contradict the international commitments laid down in the Paris Declaration and the Accra Agenda for Action.

The rise of non-core multilateral aid over the last years hence constitutes a research puzzle that needs to be addressed. Clarifying the concept of non-core multilateral aid and exploring recent trends, the project seeks to identify the motivations of the key actors from MAIs and bilateral donor ministries, as well as to assess the consequences with respect to aid effectiveness.

It will be the first systematic and comprehensive analysis of the new multilateral financing mechanisms. The results should help raise awareness among both international organisations and bilateral donors, of the associated problems and opportunities and help MAIs to take a strategic approach towards these contributions.

Keywords

  • Aid organisations
  • Politics of aid
  • Development
  • Foreign aid
  • Multilateral aid

Disciplines

  • Development
  • Diplomacy
  • Economics
  • Finance
  • Political science
  • Statistics

Collaborations

International Organisations:

  • International Trade Centre (ITC)
  • UN Educational, Scientific and Cultural Organization (UNESCO)
  • UN Development Programme (UNDP)

Relevant Countries

  • Developed countries
  • Developing countries
  • Switzerland
  • United States of America

Status

This project, started in 2012, has been completed.

Contact the project team

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Research team

Simon Hug
Coordinator
University of Geneva

Axel Dreher
Co-Cooredinator
Ruprecht-Karls-Universität Heidelberg

Katharina Michaelowa
Co-Coordinator
University of Zurich

Bernhard Reinsberg
Principal Member
University of Zurich

Francis Cheneval
Associated Member
University of Zurich

Joelle de Sépibus
Associated Member
University of Berne

Vera Eichenauer
Associated Member
Heidelberg University

Christopher Humphrey
Associated Member
University of Zurich

Stephen Knack
Associated Member
World Bank Group

Sabine Meitzel
Associated Member
World Trade Organisation – International Trade Centre

Alessandro Monsutti
Associated Member
Graduate Institute Geneva

Alain Patrick Nkengne Nkengne
Associated Member
UNESCO

Helmut Reisen
Associated Member
Organisation for Economic Cooperation and Development