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The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Mendola, Mariapia / Requate, Till / Schirle, Tammy / de Vries, Frans / Zulehner, Christine

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Volume 7, Issue 1 (Aug 2007)

Coordination Failure in Foreign Aid

Maija Halonen-Akatwijuka
  • 1University of Bristol,
Published Online: 2007-08-26 | DOI: https://doi.org/10.2202/1935-1682.1616


We analyze allocation of foreign aid to different sectors in a recipient developing country. Donors tend to favor social sectors over other public expenditure programs. Due to incomplete information coordination failure occurs. The donors may concentrate too much on the priority sectors leaving the lower priority, yet important, sectors lacking of funds. Alternatively there may be gaps in services in the priority areas because of the information problem. We find that the more similar preferences the donors have, the more scope there is for coordination failure.

Keywords: foreign aid; public goods; coordination failure

About the article

Published Online: 2007-08-26

Citation Information: The B.E. Journal of Economic Analysis & Policy, ISSN (Online) 1935-1682, DOI: https://doi.org/10.2202/1935-1682.1616. Export Citation

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