Can process conditionality enhance aid effectiveness? The role of bureaucratic interest and public pressure

Can process conditionality enhance poverty reduction in developing countries? We address this question in a political-economic framework with political distortions on the recipient and the donor side. Process conditionality is a useful tool only if the international financial institutions hold all necessary information to assess the political situation in recipient countries and to select the true representatives of the poor into a participatory process. If they do not hold this information or if bureaucratic interests reduce their incentive to acquire this information, process conditionality loses its effectiveness