Literature review: Corruption risks in development aid
This Anti-Corruption Helpdesk brief was produced in response to a query from a U4 Partner Agency. The U4 Helpdesk is operated by Transparency International in collaboration with the U4 Anti-Corruption Resource Centre based at the Chr. Michelsen Institute.
Which corruption risks are associated to the carry-over development aid funds?
The aid effectiveness debate
The principle of absorption capacity
Best practices in aid design
Despite extensive research, the Helpdesk team could not find evidence linking the carry-over of unspent development aid flows to the increase of corruption risks in a country. The literature suggests, however, that underspending is more an indication of donor interventions that fail to consider contextual variables such as the institutional setting of recipient countries and their resulting absorption capacity. Due to the urgency of this query, the content is only meant to provide a very broad overview of the main discussions
regarding aid effectiveness and corruption risks in development aid rather than a thorough review of the literature on the topic.
This Expert Answer provides some background on the debate around aid effectiveness, which is often measured as the impact of aid on poverty or economic growth in recipient countries. The highlights the importance of taking into account contextual variables, such as a countries institutional framework and its “absorption capacity” when designing aid programmes to avoid harming the recipient countries’ economy. In the final section, the answer explores some of the recommendations found in the literature to design successful aid programmes and provides a list of relevant resources for this discussion.
Roberto Martinez B. Kukutschka, Transparency International, [email protected]
Matthew Jenkins, Transparency International, [email protected]