Publication

This paper shows that proliferation of aid projects may overburden recipient governments with reporting requirements, donor visits and siphoning off scarce domestic recipient resources from directly productive use. The author presents a model of aid projects which posits a distinction between national-level governance and project-level governance. The model assumes that larger projects demand proportionally less oversight activity from the recipient. Comparative analysis suggests that to maximize development, projects should be larger where aid volume is higher, recipient resources are scarcer and national governance is good.