Abstract
Why do some governments provide less foreign assistance than they originally pledge? This research explores the origins of the ‘big-plan-small-action’ issue through an institutional analysis. The research dwells particularly on how donors’ aid management design (by examining specifically the legal-regulatory rule arrangements for policy formation and implementation) can help explain such problems. The aim is to identify the logic and design of rules for foreign aid policy-making that induce a particular set of incentives and collective actions of state agencies that, in turn, cause a gap between planning and practice in the management of foreign aid.To this end, this research critically reviews Elinor Ostrom’s Institutional Analysis and Development (IAD) framework and comes up with a refined version of it. The fine-tuning of the framework is necessary to take rule institutions more seriously. Given that existing IAD-based empirical analyses in the domain of development cooperation focus on the effects of formal rules on foreign aid policy-making, the earlier application of the framework appears ineffective at acknowledging the broader institutional contexts of policy-making rules and traditions across government units. Considering the unique contexts of emerging/young donor governments, whose policy-making tends to be governed by greater ‘discretion (room for judgment)’ under a relatively insufficient and abstract set of written rules, the IAD research requires some sophisticated analytical procedures to discern the impacts of various types and layers of policy-making rules on the outcomes.
The chosen country case is South Korea (2000-16), which has displayed one of the most severe commitment problems. Korea’s public laws and regulations have generally lacked clear logics and definitional details for the management of official development assistance (ODA). In comparison to conventional donor cases, such characteristics have left greater room for undefined policy areas to be decided at the discretion of state executives and bureaucrats. Since the greatest decision-making/corrective powers have been centered on the president, ODA planning at the top policy level has tended to be swung by his/her immediate diplomatic-political needs. Through the two nested cases of knowledge aid and multilateral aid, it is further demonstrated that the presidential ODA initiatives in those sub-policy areas have legally overridden the procedures of reflecting long-term operational considerations. No legal restrictions over the entry and exit of participants have encouraged a high level of opportunism among state agencies to rush into knowledge aid and multilateral 2 cooperation regardless of their organizational talents and traditions. More prominently, KOICA has displayed distinctive strategic behavior in order to reduce its chronic political-financial instability.
Korea’s substantial gap between annual commitments and disbursements might be a by-product of its ODA policy system, which is rationalized by a loan-grant division. However, this study argues that the commitment problem has fundamentally resulted from a lack of coordinating mechanisms, which were neither effectively put to work by the laws nor took place by the consensual norm within the system. The coordinating/oversight body remained nominal, since it performed the mandate to a limited extent without proper legal power and resource. Considering the national legacy of having had a very centralized public policy-making structure, successful government-wide coordination relied heavily upon the discretion of the president. All things considered, Korea’s ODA policy system is a case that fails to encourage reciprocal collective actions among the inherently spat-prone bureaucrats.
The research is also useful if one wonders what institutional-structural conditions need to be fixed or re-adjusted to make foreign aid policies more credible and sustainable. The empirical analysis of contexts, two action situations, and outcomes suggest that to properly understand the underlying sources for the expansionary rhetoric and associated incentive problems with a country’s development cooperation, due attention ought to be paid to the rule configuration. This will provide an insight into the extent to which hard rules might create room for informal rules to come into play and induce a unique set of incentives, and collective actions, and to end up with undesirable policy outputs.
| Date of Award | 1 Aug 2018 |
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| Original language | English |
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| Supervisor | Nahee Kang (Supervisor) & Ramon Pacheco Pardo (Supervisor) |