“might have difficulty internalizing” (Martens et al., 2002: 65). Some multilaterals view donor coordination as part of their mandates. For example, the World Bank and UN partner with the OECD-DAC in its harmonization agenda and in the Paris Declaration monitoring effort.<sup>20</sup> The World Bank has taken a lead role in promoting the principle of “country ownership” since it adopted its “Comprehensive Development Framework” in 1999.<sup>21</sup> For these reasons, we expect use of country systems to be greater for multilateral than for bilateral donors.

Among multilaterals, we further differentiate the MDBs (multilateral development banks including the World Bank, IMF and several regional development banks) from other multilateral agencies including the UN system and European Commission (EC). The non-MDB multilaterals are a heterogeneous group, but for multiple reasons we expect their use of country systems to be lower than the MDB’s use. In the EC, “responsibility rests in the hands of serving politicians from member states,” so its decisions are less apolitical than other multilateral agencies that “have genuinely delegated their management to an executive board” (Martens et al., 2002: 47). National representatives in EC foreign aid decision-making committees devote considerable effort to pursuing opportunities for their own nation’s aid contractors (Martens et al., 2002: 193). Also, much EC and UN aid is in the form of technical assistance, reducing the share of aid provided in the form of direct budget support.

Among bilateral donors, we differentiate between OECD-DAC donors and non-DAC donors. Use of country systems is expected to be higher for DAC donors, because of the DAC’s leading role in donor harmonization initiatives, and peer reviews of members’ aid programs that now include assessments of their consistency with Paris Declaration principals and objectives.

The DAC donors can be divided further, between the “Nordic Plus” group and others. Nordic Plus donors include Denmark, Finland, Norway, Sweden, Ireland, the Netherlands, and the United Kingdom. The group’s purpose is to improve complementarities among its members, through division of labor based on comparative advantages (NORAD, 2006; de Renzio, 2005). By reducing the number of sectors and countries each donor operates in, transactions costs for recipients can be reduced, at the price of reduced visibility for the donors. We take membership in the Nordic Plus group as a proxy for low “skepticism” of aid effectiveness among the domestic constituencies of these bilateral donors. Empirical support for this hypothesis could be interpreted as merely indicating that donors committed to certain parts of the Paris Declaration agenda tend to be committed to other parts of it. At a minimum, however, tests of the Nordic

> 20 The OECD-DAC is itself a multilateral agency, representing most of the OECD’s bilateral donor countries.  The OECD-DAC is not a donor agency, but conducts peer reviews of its members’ aid programs, maintains aid databases, and pursues research and advocacy work on improving aid effectiveness.

> 21 However, “ownership” is sometimes criticized as a euphemism for developing countries’ adoption of policies advocated by the Bank and other donors (OECD, 2008b).

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