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Nopoor Policy Brief Nr. 18: Strategies and Performance of new Donors: the Political Economy of Development NGOs.

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Foreign aid has become increasingly decentralized: aid donors delegate tasks and provide funds to Nongovernmental Organizations (NGOs) in order to have these agencies conceive and implement aid projects. This is a complicated transaction. Aid delivered by NGOs has garnered criticism from beneficiary countries themselves. Several of these NGO host countries have suggested that NGOs infringe sovereignty by disrupting the established order, either by means of inciting social agitation, or, at the very least, by acting as surrogates of the State. Such tensions undermine the efficiency of foreign aid because host countries are reluctant to host aid agencies that could have any real political impact. This results in countries opening their borders only to NGOs that have little chance of affecting aid ownership. We find that democratic host countries might impose fewer restrictions on NGO operations; decentralized aid can have an impact on political equilibria, in particular when only a fraction of the population is targeted by particular aid programmes. Such political shifts usually generate winners and losers, causing decentralized aid to have a negative effect on inadvertent non-beneficiaries.           

Image: ©IRD - Boulvert, Yves