Political economy of aid
Political economy analysis of bi- and multilateral development cooperation is a central research theme at the German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE). The researchers analyse the diverging interests, incentives, power relations and resources of development actors and how these determine the space for political decision making in the relationship of development partners and partner countries bilaterally, as well as in international fora such as the Global Partnership for Effective Development Co-operation. The diverging interests and incentive structures of development actors are of particular interest if examined against the legally nonbinding international Aid & Development Effectiveness Agenda. At the core of the agenda are principles and guidelines to increase the effectiveness and efficiency of international development cooperation - e.g. the greater channeling of aid through the use of partner country systems (i.e. public financial management mechanisms) - that are jeopardized due to a lacking will to reform on both sides of the aid relationship. DIE research aims to identify feasible recommendations and proposals for reform that – within the confines of the political economy of development cooperation – orient towards the aid & development effectiveness agenda.