Call edition 2012

A new edition of the Prize of the Belgian Development Cooperation has been launched. This call is open until March 31st, 2011. You can read in the regulations whether you comply with the criteria for participation.

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Improving public outcomes in developing countries / Application of incentive theory to foreign aid and public resource management

Elisabeth PAUL researcher laureate

°1976 Belgium
Licentiate in Business Management, 1998

Improving public outcomes in developing countries / Application of incentive theory to foreign aid and public resource management

Why are there such complex procedures for providing foreign aid? There is a very long chain between – let us say – the Belgian tax payer who makes an obligatory contribution to Belgian development efforts and the poor Burundian or Vietnamese who hopefully sees the benefit of it. Why are there, worldwide, tens of thousands of public servants and experts working in public development aid? Are they all really necessary? The aid industry swallows a significant part of the development money itself, and not always with positive results. And then, in a subsequent phase, much of that money ends up in the coffers of the government of the country that receives it, whence it once again follows a very roundabout route before finally reaching those for whom it’s intended. Certainly this long chain could be considerably shortened, but drastic amputation is not feasible. There is perhaps no other realistically conceivable way of getting money in a proper way to the poor than meticulous procedures, all kinds of specialized aid organizations in the North, and national governments who play a major part in implementation. This thesis makes a critical examination of various links in the aid chain, both in the donor countries and organizations and the governments in the countries receiving aid. With the help of recent economic insights and techniques four relevant questions are dealt with: why doesn’t aid help better, how can the management of public resources be improved in a developing country, how can corruption be combated by greater transparency, and how, by financial or other incentives, can the conduct of national officials be improved?
The ‘new institutional economics’ applied here are in the process of rapid development and in four chapters of her thesis the author provides an overview and three original contributions to the literature. That all the chapters have already been presented internationally, albeit in a different form, and that most have already been published is an indication of the scientific value of these contributions. The theory that is applied is sometimes very abstract and often mathematically formulated. The author evinces a broad knowledge and provides interesting theoretical insights. Importantly, however, she always succeeds in translating these insights into concrete recommendations. An extremely timely and relevant work.

Report: Prof. R. Renard, Institute of Development Policy and Management, Universiteit Antwerpen, Belgium