Aiding the National Interest: the Micro-Level Determinants of Earmarked Funding in an Age of Changing Development Priorities

Global development cooperation is undergoing fundamental transformations, with donors increasingly prioritizing national interests over needs-based aid principles. This study investigates how this shift in donor motives affects cooperation with international organizations (IOs). Focusing on earmarked funding, a modality giving donors significant discretion over how their funds are used, I examine the preferences of development policymakers when faced with competing policy directives. To break new methodological ground, I combine a vignette experiment with a conjoint experiment, administered to over 50 development policymakers from the German aid bureaucracy. The vignette experiment randomly assigns participants to a treatment group, informing them that the development minister requires all cooperation to reflect Germany's national interest. The control group is told that the ministry's objectives are based on need. Participants then complete discrete choice tasks, evaluating hypothetical IO profiles that vary in attributes such as performance, relevance to Germany's multilateral strategy, representation of German nationals, presence of a JPO program, expertise, and legitimacy for recipients. This innovative design allows me to identify the preferences of German development policymakers for collaborating with different IOs and, crucially, to understand how a change in political directives toward national interest affects their choices. The findings provide critical insights into the evolving landscape of multilateral cooperation and the micro-level drivers of aid allocation decisions.