Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/46559
Authors: 
Öhler, Hannes
Nunnenkamp, Peter
Dreher, Axel
Year of Publication: 
2011
Series/Report no.: 
CESifo working paper: Public Choice 3454
Abstract: 
Performance-based aid has been proposed as an alternative to the failed traditional approach whereby donors make aid conditional on the reform promises of recipient countries. However, hardly any empirical evidence exists on whether ex post rewards are effective in inducing reforms. We attempt to fill this gap by investigating whether the Millennium Challenge Corporation (MCC) was successful in promoting better control of corruption. We employ a difference-in-difference-in-differences (DDD) approach, considering different ways of defining the treatment group as well as different time periods during which incentive effects could have materialized. We find evidence of strong anticipation effects immediately after the announcement of the MCC, while increasing uncertainty about the timing and amount of MCC aid appear to weaken the incentive to fight corruption over time.
Subjects: 
foreign aid
corruption
Millennium Challenge Corporation
MCC effect
JEL: 
F35
O17
Document Type: 
Working Paper

Files in This Item:
File
Size
248.19 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.