THE ‘CAUSAL TREE’: A COMPREHENSIVE ANALYSIS OF THE RELATIONSHIP BETWEEN UNDP EXPENDITURES AND QUALITY OF GOVERNANCE IN DEVELOPING COUNTRIES

Abstract

The effects of foreign aid on development and governance has long been a much debated subject. Some scholars have primarily focused their examinations on the correlation between foreign aid and the democratization of states, while others have suggested that both bilateral and multilateral aid are allocated based on pre-existing governance policies including economic liberalization, political liberalization and democratization. More optimistic scholars have argued that increased aid and funding would lead to more investments and savings, which would ultimately lead to higher growth rates. On the other hand, more skeptical scholars have argued that foreign aid has had an adverse effect on development due to an overreliance on aid and corrupt governments. While there is an abundance of anecdotes in the literature, there is an apparent absence of sufficient empirical data specifically examining the connections between governance in developing countries and the subsequent contribution and role of IDOs. Scholars are only recently starting to recognize the lack of empirical research and analysis on the links between foreign aid and governance over time and across countries around the world. Despite the status and reputation that the UNDP carries as a catalytic development agency, there so far have been no studies put forward that empirically examine whether any links exist between UNDP expenditures towards developing countries, and shifts in their overall quality of governance. Building upon the empirical methodologies of other relevant studies, this dissertation’s contribution to the development discourse is two-fold: i) the construction of a unique and comprehensive dataset, compiled using new and updated sources; and ii) a methodologically robust and unprecedented empirical study on the possible relationship between financial resources expended by a major international development organization and the governance quality of its programme countries. This dissertation tests which theoretical camp (optimists vs. skeptics) best explains whether or not UNDP’s demand-led approach to programming, operating within the development framework and priorities set by the countries themselves, translates to overall improvements in their governance quality. In short, the overarching conclusion is that aid funding – like those expended by UNDP – do not necessarily translate into positive governance outcomes.