Cambridge University Press


Dietrich, Simone. 2021. States, Markets, and Foreign Aid. Cambridge University Press

Co-Winner of the 2022 APSA International Collaboration Section Best Book Award.

Why do some donor governments pursue international development through recipient governments, while others bypass such local authorities? Weaving together scholarship in political economy, public administration, and historical institutionalism, States, Markets, and Foreign Aid makes the case that the bureaucratic institutions of donor countries shapes donor-recipient interactions differently despite similar international and recipient country conditions. Donor nations employ institutional constraints that authorize, enable, and justify particular aid delivery tactics while precluding others. Offering quantitative and qualitative analyses of donor decision-making, the book illuminates how donor countries whose institutions are organized around neoliberal principles bypass recipient governments, while donors with more traditional public sector-oriented institutions cooperate and engage recipient authorities on aid delivery.  

The book establishes connections between ideological orientations and patterns of donor behavior. It demonstrates how internal beliefs and practices about states and markets inform how donors see and set their objectives for foreign aid and international development itself. These insights carry implications for debates about the effectiveness of international development efforts, donor coordination, the diffusion of international development norms in world politics, as well as the role of bureaucratic organization in foreign policy and multilateralism, more broadly.


Podcast Public Lecture at the Max-Planck-Institute for the Study of Societies


Reviews: Brookings (by George Ingram), Development Policy (by Terence Wood), From Poverty to Power (by Duncan Green), Review of International Organizations (by Gabriella Montinola), Perspectives of Politics (by Matthew D. DiLorenzo), Foreign Affairs (by Nicolas van de Walle), Political Science Quarterly (by Tana Johnson)



‘We cannot make progress on the fundamental question of whether foreign aid is effective without understanding why donor agencies pursue such different strategies to achieve their goals. Drawing on extensive interviews with aid decision-makers and sophisticated quantitative analysis, Dietrich expertly illuminates the historical roots of donor practices, challenging the idea that there is a single model of aid effectiveness to which all governments should aspire and around which we should expect convergence. In order to be practical and implementable, foreign aid strategies must align with the underlying ideological orientation of the donor government – a hugely important insight that is relevant to scholars, policymakers, and practitioners concerned with donor coordination and the impact of foreign aid on recipient countries.' Jeremy Weinstein - Professor of Political Science, Stanford University 

‘Dietrich`s excellent book is a must-read for scholars of political economy. It shows that national ideas about the state`s proper role in the economy shape aid-delivery institutions, which can either help build state capacity in the developing world, or bypass governments to delivery aid directly to the people. Considering the literature`s focus on strategic and materialist motivations behind foreign aid, this book makes a surprisingly strong case for the importance of ideology.' James Vreeland - Professor of Politics and International Affairs, Princeton University

‘This book is essential reading for those in the academic or policy community who want to understand the variation in foreign aid policies of donor countries. Drawing on a diverse set of theories and using a creative multi-method approach, Dietrich shows how ideological orientations about the role of the state in donor countries shape foreign aid institutions and, therefore, aid delivery patterns. The book is impressive in its theoretical and empirical contributions to key questions in the field of international political economy.' Jon Pevehouse - Vilas Distinguished Professor of Political Science, University of Wisconsin-Madison

`This book provides a novel perspective on the politics of foreign aid in donor countries. It represents an important advance in our knowledge of what forces shape the giving of assistance to developing countries. And it helps us account for why the process of aid-giving is so different across donor countries.' Helen Milner - B.C. Forbes Professor of Politics and International Affairs at Princeton University, Princeton University

"Foreign aid comes in many varieties - with some varieties more appropriate and impactful than others. In States, Markets, and Foreign Aid, Simone Dietrich aims to explain the origins of such differences - by looking, in particular, on why some donor governments provide aid directly to recipient governments while others choose to bypass local authorities. The book`s novelty is in the suggestion that to understand countries` approach to foreign aid, we must analyze aid agencies as domestic agencies first. Approaching aid that way reveals that foreign aid reflects and clearly mirrors domestic ideational orientations and policies of the donor country. The elegance of the argument is an outcome of incredible and careful research. States, Markets, and Foreign Aid is a wonderful example of what excellent social science should look like. The book uses quantitative measures as well as qualitative case studies. It explores and relies on deep historical context. It engages with existing approaches to foreign aid as well as broader theores in political science and sociology. These empirical and theoretical engagements allow Simone Dietrich to approach foreign aid from a new angle and to offer a real contribution to the field. Nitsan Chorev - Harmon Family Professor of Sociology and International Studies at Brown University.

"A timely book, very clearly written, methodologically sound, conceptually precise, whose scientific objectives are ambitious. Simone Dietrich offers an in-depth examination of the beliefs and ideological landscapes information foreign aid. She offers a mise en parallèle of several institutions across times and spaces, during and after the end of the Cold War. A useful and important reading for scholars and practitioners." Davide Rodogno - Professor, International History and Politics, Graduate Institute of International and Development Studies