In recent years, the European Union (EU) institutions have become an increasingly important donor to multilateral development agencies (MAIs). However, their contributions appear to be almost exclusively earmarked voluntary contributions (multi-bi aid), which have been heavily criticized for diluting the core mandates of MAIs, increasing transaction costs, and causing aid fragmentation.
Are EU contributions to MAIs indeed more earmarked than other donor contributions? And if so, what explains this variation? To address the first question, we will compare the allocation patterns of EU institutions with other donor contributions, in particular with respect to the extent of multilateral earmarking. Moreover, using our own coding of project-level information in the CRS database of the OECD/DAC, we will assess whether earmarking by EU institutions is qualitatively different from that of other donors. In a second step, we will examine the underlying reasons for such a policy, which could reflect either the development priorities of the EU institutions or the varying heterogeneity of preferences over aid distribution of the member-states. The second part of the analysis will be based on qualitative interviews and a review of the available official documents.
