Building Trust, Bridging Gaps: An Analysis of Donor-Recipient Trust in Dutch Official Development Assistance

Abstract

Official Development Assistance (ODA) has been instrumental in fostering economic development and improving welfare in developing countries. The Netherlands has a longstanding commitment to ODA, evolving its aid sector into a professional domain. Effective deployment of ODA promises benefits like economic stability, improved governance, and human capital development for recipients, while advancing Dutch interests in trade, migration, and global challenges such as climate change. However, the success of ODA hinges on effective implementation, which remains challenging due to institutional complexities and execution uncertainties. Game-theoretic perspectives of the donor-recipient relation highlight conflicts and asymmetric information between donors and recipients, which limit the cooperative outcomes. Trust is proposed as a crucial factor to facilitate cooperation by improving communication, reducing transaction costs and enhancing initiative-taking. Yet, understanding the concrete emergence of trust and its effects on collaboration and ODA outcomes remains problematic due to methodological constraints in existing macroeconomic studies. This thesis investigates the impact of donor-recipient trust on Dutch ODA outcomes, employing a dual-stage research approach combining quantitative keyword analysis with qualitative insights from Dutch development cooperation (DC) evaluation documents and expert interviews. Findings reveal trust-building as a time-intensive process influenced by factors like past interaction, transparency, and mutuality. The study confirms trust's pivotal role in overcoming collective action challenges within Dutch ODA, bridging information gaps, and improving intervention effectiveness. Despite its critical role in enhancing cooperation, trust receives limited explicit attention in evaluation documents, pointing to gaps in awareness and capacity, as well as a focus on quantitative metrics and short term results. Recommendations emphasize the need for practitioners to support relational trust-building through enhanced transparency, equitable partnerships, and clear responsibility delegation, as well as a shift in incentive structures at policy and operational levels to prioritize relational trust-building over short-term, quantifiable result.