States, Markets, and Foreign Aid

In this meticulously researched book, Dietrich explores why and how donor countries deliver aid to needy recipients. She argues that the various ways in which aid is delivered reflect differences in national administrative cultures and, in particular, ideological notions of what role states should play in development. More neoliberal countries, such as the United States, tend to deliver aid via organizations that bypass the central state in the recipient country, particularly when that state has serious governance deficiencies. On the other hand, Dietrich finds that the social democratic states of western Europe are more likely to deliver their aid directly to state bodies. The statistical evidence offered for this arresting hypothesis will not convince all readers, but two compelling chapters reinforce its plausibility through extensive interviews with officials in donor agencies. Unfortunately, Dietrich does not discuss the developmental implications of these differences in aid delivery, so the reader is left wondering how the choices donors make affect development in low-income countries.