This article evaluates the hypothesis that increased donor transparency leads to lower levels of corruption. The authors explore the relationship between aid transparency (quantified by the breadth of project information provided by donors) and levels of corruption in recipient countries. They find that, on the aggregate, more transparent aid leads to lower levels of corruption in recipient countries.
The authors examine aid data from nearly one million projects totaling $4.2 trillion from all major multilateral and bilateral donors. They control for the likelihood of the bias that more transparent donors are likely to choose recipient countries that are less corrupt. The authors find unexpectedly strong support for the hypothesis that greater donor transparency leads to lower corruption.
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