Bureaucratic incentives, path dependence, and foreign aid: An empirical institutional analysis of irrigation in the Philippines

At least 25 developing countries are embarking on irrigation governance reforms to address the persistent problem of poor irrigation performance. Some scholars suggest that the patterns of construction, deterioration, rehabilitation, and modernization commonly found among irrigation agencies in these countries are rational because of the time inconsistency problem of information. I argue instead, using panel data from the Philippines, that the problem of poor performance is linked to inherent incentive problems faced by public bureaucracies, how these incentives became entrenched in the path dependence of irrigation development, and how these were reinforced by incentives embedded in irrigation aid, particularly by the moral hazard problem and the fungibility of irrigation aid.