Donor governments are increasingly tying their contributions to international organisations like the UN and World Bank to specific themes or countries, even though evidence shows this "earmarked" funding makes those organisations less effective. This matters because international development organisations are central to tackling global challenges such as climate change, pandemics, and state fragility. Yet their funding has become more restricted, limiting their flexibility to respond to emerging needs and diverting administrative resources toward reporting requirements. The project asks a pointed question: if earmarked funding is known to be problematic, why does it keep growing? The research will interview development policymakers, analyse observational data, and run survey experiments with government officials and parliamentarians to understand the incentives driving this funding choice. If successful, it could reveal policy levers to make international development financing more effective—improving how billions of pounds are spent on aid without most people ever noticing the change. The findings may also offer broader lessons about how evidence does or does not shape policy decisions in other areas of public life.
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FETA will examine whether and when development policymakers consider (scientific) evidence when choosing among different ways to fund international development organizations (IDOs) like the United Nations and the World Bank. IDOs are key to addressing global development challenges, such as climate change, fragile states, and pandemics, but their funding position has considerably weakened in recent years. Rather than providing unrestricted funding, donor governments have increasingly earmarked their IDO contributions for specific themes, countries, or projects. My previous FLF project showed that earmarked funding undermines the performance of IDOs. Earmarked funding often limits the flexibility of IDOs to respond to emergent development needs and increases the costs of aid delivery through additional reporting, thereby channeling administrative resources into fulfilling accountability requirements that are no longer available for activities for development. By shifting IDO accountability back to the donors, earmarked funding also tends to undermine recipient-country ownership, a core principle of the aid effectiveness agenda. Against this background, FETA will address a key puzzle: Why does earmarked funding—despite abundant evidence of its disadvantages—continue to grow? To address this question, FETA will study the incentives of development policymakers for earmarked funding and examine whether information about the effectiveness of earmarked funding affects the funding preferences of these key stakeholders. Its theoretical approach acknowledges the considerable diversity in incentives and motivations for stakeholders in different institutional contexts and staff roles regarding the pursuit of different funding modalities in international development cooperation. To systematically study these incentives and motivations, FETA will draw on semi-structured interviews with development policymakers, large-N regression analysis of observational data, and survey experiments with government officials and IDO staff. To understand the domestic politics of earmarked funding in the donor country, FETA will also conduct surveys with parliamentarians and citizens. By examining the drivers of earmarked funding in donor administrations and IDO bureaucracies, I will gain insight into the policy levers to make IDO financing more effective. At the same time, I will learn about whether and how evidence shapes policy decisions, drawing on the case of development cooperation. The project will generate benefits for decisionmakers in international development cooperation with an interest in a more effectively funded multilateral system, with transferrable lessons for public policy and social sciences that go beyond the specific domain of development cooperation.
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