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Keywords:

  • foreign aid;
  • vertical funds;
  • innovative aid models

Abstract

This paper assesses two innovative development financing models—specialised global partnership funds (e.g. The Global Fund) and market-based approaches (e.g. GlobalGiving). Via a simple typology of development financing approaches these models are shown to contain distinctive and new elements. They have definite strengths, particularly in raising funds as well as unbundling fundraising from design and implementation. However, these models are not panaceas and replicate many weaknesses of ‘traditional’ approaches to foreign aid. Donors should carefully consider the merits of supporting new financing structures relative to including innovative design features within existing aid programmes. Copyright © 2010 John Wiley & Sons, Ltd.