Cambridge University Press


Dietrich, Simone. 2021. States, Markets, and Foreign Aid. Cambridge University Press (release 11 Nov 2021; order here, 20% discount code: SMFA2021)

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.

Reviews: Brookings (by George Ingram), Development Policy (by Terence Wood), From Poverty to Power (by Duncan Green)


‘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 - University of Wisconsin-Madison

‘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 - Princeton University

‘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 - Stanford University 

`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 - Princeton University.