We show that the impact of foreign aid on bureaucratic quality in recipient countries varies with the mode of delivery. Specifically, grants are found to impair the functioning of the bureaucracy, whereas loans are not. The negative impact of grants is larger when they are given as budget...

"An introduction to the contemporary challenges states in the developing world face, and to the ways in which they can build capacity to handle them. It examines the key institutions of the state, the challenges of institutional reform, and the importance of institutional reform in achieving...