Donor bureaucratic organization and the pursuit of performance-based aid through multilateral trust funds

Multilateral trust funds have become an increasingly prominent funding mechanism in international development. Yet marked differences exist in the extent to which donors support trust funds. In this study, we argue that differential support for trust funds originates in donor domestic politics. Specifically, it results from differences in national bureaucratic rulebooks that incentivize aid officials to support trust funds more or less. Because trust funds place a high premium on performance and results, aid officials from donor countries whose aid bureaucracies are set up to promote performance and results are more likely to support trust funds than their counterparts from aid bureaucracies that are less performance-oriented. We find robust support for differential use of trust funds in terms of incidence of usage, type of preferred fund and outsourcing behavior, drawing on a data set of World Bank trust funds. Our project contributes to the understanding of international development cooperation by mapping donor political economies to the rise of trust fund usage. We also contribute to a better understanding of the global diffusion of performance-based evaluation.