Can Process Conditionality Enhance Aid Effectiveness? The Role of Bureaucratic Interest and Public Pressure

Can process conditionality really enhance poverty reduction in developing countries? This question is addressed in the framework of a politico-economic model considering political distortions both on the recipient and on the donor side. It turns out that process conditionality is a very useful tool to raise the welfare of the poor as long as the international aid organizations hold all necessary information to assess the political situation in recipient countries and to select the true representatives of the poor into a participatory process. If they do not hold this information or if other bureaucratic interests reduce their incentive to acquire this information, process conditionality loses its effectiveness in achieving the desired objective.