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Date: 2024-07-24 Page is: DBtxt003.php L0900-IRD-fund-flows
This is how it is!
Most of the funds flow through organizations that are based in donor countries. This is understandable, but it reduces the amount of value that reaches intended beneficiaries. The 'multiplier effect' is an important component of the economic system, and because of this a big part of the multiplier effect happens in the donor country and not where the beneficiaries are located.
This graphic also identifies 'corruption' as an issue. This is a problem at many levels. It reduces the funding that reaches beneficiaries, but it in many cases large scale corruption results in funds exiting the beneficiary country and relocating back to one of the donor countries.
This is how it should be!
If the resources were to actually reach the intended beneficiaries and the work was channelled through local entities, the total value delivered would be substantially more than has been the norm for the past several decades.
The Effectiveness of International Relief and Development is Low.
One of the reasons for low effectiveness is that a large part of development assistance expenditure flows into organizations that are based in donor countries rather than in the countries where the intended beneficiaries are located.
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