Earmarked funding and the effectiveness of international development organizations (EF-IO)
Lead Research Organisation:
University of Glasgow
Department Name: School of Social & Political Sciences
Abstract
The EF-IO research program will examine how earmarked funding affects the effectiveness of international development organizations (IDOs) in addressing global development challenges. 'Earmarked funding' refers to financial contributions from donor governments to IDOs whose use is restricted to specific recipient countries, themes, or sectors. Over the past two decades, flows of earmarked funding to IDOs have increased tenfold, which has led to growing concerns about a decline in the ability of such organizations to allocate resources in accordance with development needs, increased transaction costs of aid delivery, and unhealthy competition for funding among IDOs. Apart from case studies on individual IDOs, our knowledge about the consequences of earmarked funding on IDOs is limited.
Against this background, EF-IO pursues the following research aims:
-- develop a theoretical framework to understand the variegated effects of earmarked funding on IDOs;
-- establish the complex relationship between earmarked funding, organizational performance, and project performance;
-- examine to what extent IDO performance is related to IDO effectiveness.
To achieve these objectives, EF-IO will use a multi-method approach combining qualitative analysis of 40 semi-structured interviews with development stakeholders, structural regression analysis of large-N administrative data at different levels of analysis, and survey data analysis at the country level. First, EF-IO will draw on semi-structured interviews with over 40 IDO stakeholders to establish the prevalence of a 'micro-macro paradox' of earmarked funding, whereby the availability of earmarked funding can bolster the performance of individual projects but at the same time undermine the organizational performance of implementing IDOs. Second, by extending the available data on earmarked funding and linking them to new data on performance, EF-IO will establish whether and how earmarked funding affects the performance of individual projects and their implementing IDOs. To that end, EF-IO will further develop appropriate methodological tools to assess the causal impact of earmarked funding, including structural regression analysis and instrumental-variable designs. Third, through piloting a survey experiment, EF-IO will examine how IDO performance affects aid effectiveness as perceived by country elites. To that end, it will build on a UN-administered survey with recipient-country elites.
Aside from contributing to several strands of social-scientific research, findings from EF-IO will inform the policy debate on earmarked funding. By providing fresh evidence on how earmarked funding affects the effectiveness of IDOs, it suggests avenues for reform of such funding in view of maximizing the potential of IDOs to achieve the 2030 Sustainable Development Goals (SDGs) while considering the need for donors to ensure visibility of their development contributions.
Against this background, EF-IO pursues the following research aims:
-- develop a theoretical framework to understand the variegated effects of earmarked funding on IDOs;
-- establish the complex relationship between earmarked funding, organizational performance, and project performance;
-- examine to what extent IDO performance is related to IDO effectiveness.
To achieve these objectives, EF-IO will use a multi-method approach combining qualitative analysis of 40 semi-structured interviews with development stakeholders, structural regression analysis of large-N administrative data at different levels of analysis, and survey data analysis at the country level. First, EF-IO will draw on semi-structured interviews with over 40 IDO stakeholders to establish the prevalence of a 'micro-macro paradox' of earmarked funding, whereby the availability of earmarked funding can bolster the performance of individual projects but at the same time undermine the organizational performance of implementing IDOs. Second, by extending the available data on earmarked funding and linking them to new data on performance, EF-IO will establish whether and how earmarked funding affects the performance of individual projects and their implementing IDOs. To that end, EF-IO will further develop appropriate methodological tools to assess the causal impact of earmarked funding, including structural regression analysis and instrumental-variable designs. Third, through piloting a survey experiment, EF-IO will examine how IDO performance affects aid effectiveness as perceived by country elites. To that end, it will build on a UN-administered survey with recipient-country elites.
Aside from contributing to several strands of social-scientific research, findings from EF-IO will inform the policy debate on earmarked funding. By providing fresh evidence on how earmarked funding affects the effectiveness of IDOs, it suggests avenues for reform of such funding in view of maximizing the potential of IDOs to achieve the 2030 Sustainable Development Goals (SDGs) while considering the need for donors to ensure visibility of their development contributions.
Publications
Dreher A
(2024)
Aid effectiveness and donor motives
in World Development
Heinzel M
(2024)
Incentivizing Responses in International Organization Elite Surveys: Evidence from the World Bank
in Journal of Experimental Political Science
Heinzel M
(2023)
Earmarked Funding and the Control-Performance Trade-Off in International Development Organizations
in International Organization
Reinsberg B
(2023)
Earmarked Funding and the Performance of International Organizations: Evidence from Food and Agricultural Development Agencies
in Global Studies Quarterly
Reinsberg B
(2023)
Women's leadership and the gendered consequences of austerity in the public sector: Evidence from IMF programs
in Governance
Reinsberg B
(2023)
Does earmarked funding affect the performance of international organisations?
in Global Policy
| Description | The award helped build-for the first time-a systematic evidence base on the effectiveness of earmarked funding in international development organizations (IDOs). Across different levels of analysis, we found that earmarked funding increases transaction costs and reduces aid effectiveness. However, earmarked funding also allows organizations to do more, by expanding their overall resource envelope. Earmarked funding thereby poses a tradeoff for organizations (and their donors) in that they must choose between fulfilling ther mandate and doing it well. |
| Exploitation Route | The outcomes of this funding are relevant to both academics and policymakers. Academics may benefit from our unique data collection to advance our understanding of the causes and consequences of IDO resourcing. Our new Earmarked Funding Database-including all earmarked activities of 50 donors with 340 IDOs in 1990-2020-allows researchers to examine the role of funding structures, rather than total resources, for IDO policy outcomes. There has already been keen interest in the data by the research community. A group of scholars has already been given pre-release access to the data to develop research projects that build on the new data. Public release is planned for spring 2024. Policymakers benefit from the evidence that the project generated which shows that earmarking induces performance losses and that these losses can be significant. Our analyses at the project level show that earmarked projects perform worse than comparable core-funded projects. At the organizational level, the results show that earmarked funding undermines the capacity of IDOs to deliver sustainable results. These results suggest that core funding is better value for money for donors. Donors should thus increase their efforts to un-earmark their IDO contributions. |
| Sectors | Other |
| URL | http://www.bernhardreinsberg.wordpress.com/efio |
| Description | Academic impact: We presented our work from the project internally to our Advisory Board, at locally-organized workshops, and at international conferences. On all occasions, our work was well received and stakeholders engaged actively with it by providing helpful feedback. The latest piece of evidence on the importance of our work is the number of high-quality submissions we received in response to a call for papers for a workshop on 'resourcing international organizations', which will be held in Glasgow later this year. Workshop participants from around the world will use our new dataset to address research questions related to the causes and consequences of changing resourcing patterns at international organizations. Beyond using our data, participants have expressed interest in submitting to a special issue in a high-impact journal on the resourcing of international organizations. Non-academic impacts: While the project is at an early stage, tangible impact is forthcoming. Policymakers have received pre-prints of our outputs and expressed interest to learn more about our research during presentations with policy teams at the Foreign, Commonwealth, and Development Office (FCDO), German Institute for Development Evaluation (DEval), the International Fund for Agriculture and Development (IFAD), and the Organization for Economic Cooperation and Development (OECD). The OECD/DCD team invited us to organize and deliver an expert roundtable during the 2022 Multilateral Development Finance week, dedicated to discussing the latest research on the effectiveness of earmarked funding in international organizations. As this event was broadcast to a global audience, we would expect policy impact to be forthcoming in the near future. |
| First Year Of Impact | 2022 |
| Sector | Other |
| Impact Types | Societal,Policy & public services |
| Description | Parliamentary inquiry on UK aid architecture |
| Geographic Reach | Multiple continents/international |
| Policy Influence Type | Contribution to a national consultation/review |
| URL | https://committees.parliament.uk/event/17656/formal-meeting-oral-evidence-session/ |
| Description | Research Grant |
| Amount | £491,124 (GBP) |
| Funding ID | ES/W012332/1 |
| Organisation | Economic and Social Research Council |
| Sector | Public |
| Country | United Kingdom |
| Start | 08/2023 |
| End | 08/2026 |
| Description | IDOS Research Institute |
| Organisation | German Development Institute |
| Country | Germany |
| Sector | Public |
| PI Contribution | I initiated a research partnership with the IDOS (German Institute of Development and Sustainability). I visited the IDOS in September 2022 to develop ideas for a joint research project with the Division on International and Transnational Cooperation. I also presented early-stage results from our project on earmarked funding that is directly relevant to the work on international development cooperation at the institute. Finally, I provided key data analysis on earmarked funding patterns by German aid agencies feeding into IDOS policy advice. |
| Collaborator Contribution | The IDOS team provided feedback on research outputs and co-developed ideas for future joint research. Furthermore, the IDOS team involved me in the drafting of a consultancy report targeted to the German federal ministry of development cooperation. |
| Impact | No public outputs yet |
| Start Year | 2022 |
| Description | Organization for Economic Cooperation and Development |
| Organisation | Organisation for Economic Co-operation and Development OECD |
| Country | France |
| Sector | Public |
| PI Contribution | Our team initiated a partnership with the Organization for Economic Cooperation and Development (OECD), Development Cooperation Directorate (DCD). This partnership led to several key outputs. First, I organized an expert roundtable on "Time to rethink earmarked funding practices? New data, new evidence, and new directions", with participation from OECD/DCD staff and international experts. The event helped raise awareness about earmarked funding and disseminate early-stage findings on the effectiveness of this funding to international development policymakers. Second, the sustained exchanges with OECD/DCD staff helped us maximize the coherence of our respective data collection effort. As a result, our earmarked funding dataset is fully compatible with the official data held by the organization. Third, we provided input to the 2022 Multilateral Development Finance Report, the flagship publication of the OECD/DCD. |
| Collaborator Contribution | OECD/DCD staff provided in-kind contributions to the project by making available staff time. They provided critical technical input to understanding the OECD/DAC Creditor Reporting System. They also provided comments on our own coding decisions and the draft codebook for our data. Finally, OECD/DCD staff helped advertise the expert roundtable in their networks to maximize its policy impact. |
| Impact | Reinsberg, B., Heinzel, M., & Siauwijaya, C. (2023). Tracking earmarked funding to international organizations: Introducing the Earmarked Funding Dataset. Available on Harvard Dataverse (https://doi.org/10.7910/DVN/WCS99H). |
| Start Year | 2022 |
| Description | Expert roundtable on earmarked funding |
| Form Of Engagement Activity | A formal working group, expert panel or dialogue |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Policymakers/politicians |
| Results and Impact | Our team organized and delivered the expert roundtable on "Time to rethink earmarked funding practices? New data, new evidence, and new directions", during the Multilateral Development Finance Event Week. The roundtable was organized on invitation by the Organization for Economic Cooperation and Development, who hosted it virtually on 30 November 2022, 15:30-17:00 CET, via Zoom. The event furthered an improved understanding of the phenomenon of earmarked funding, by sharing the results of latest research, policy analysis, and stakeholder discussions. Participants obtained clear quantifiable insights into the effectiveness of earmarked funding. |
| Year(s) Of Engagement Activity | 2022 |
| URL | https://twitter.com/b_reinsberg/status/1597152199402221570 |
| Description | GPN workshop |
| Form Of Engagement Activity | Participation in an activity, workshop or similar |
| Part Of Official Scheme? | No |
| Geographic Reach | Regional |
| Primary Audience | Postgraduate students |
| Results and Impact | Under the leadership of the Research Associate, the University of Glasgow hosted the first Global Policy North Research Network workshop event. Following the formation of the Global Policy North Research Network in autumn 2022, these workshops will take place every 6 months at various institutions in the UK. The workshop advanced the research of all participants and stimulated discussions about the role of international organizations in a multipolar world. |
| Year(s) Of Engagement Activity | 2023 |
| Description | Global Political Economy Research Network (GPERN) |
| Form Of Engagement Activity | Participation in an activity, workshop or similar |
| Part Of Official Scheme? | No |
| Geographic Reach | Local |
| Primary Audience | Postgraduate students |
| Results and Impact | Our team launched the Global Political Economy Research Network (GPERN), a network of Glasgow based scholars committed to tackling global challenges through the lens of political economy. We are committed to mutual support, inter-disciplinary exchange, and promoting research excellence. Our members are from all social sciences, including economics, education, geography, history, law, management, politics and international studies, public policy, sociology, and others. The key activity of the network has been a monthly research seminar featuring two network members who share their research and obtain feedback from peer members. Attendees find the exchanges uniquely beneficial in shaping their ideas and advancing their research. |
| Year(s) Of Engagement Activity | 2022,2023 |
| Description | Parliamentary enquiry on UK aid |
| Form Of Engagement Activity | A press release, press conference or response to a media enquiry/interview |
| Part Of Official Scheme? | No |
| Geographic Reach | International |
| Primary Audience | Policymakers/politicians |
| Results and Impact | Our project team submitted to a UK parliamentary inquiry on the current foreign aid architecture, notably the role of the development finance institution British International Investment (BII), in February 2023. We examined the portfolio of BII activities, its governance structure, and made policy recommendations to help fill knowledge gaps on development finance institutions. |
| Year(s) Of Engagement Activity | 2023 |
| URL | https://committees.parliament.uk/event/17656/formal-meeting-oral-evidence-session/ |