The Contractual and Transnational Nature of Sovereign Donor-Trustee International Aid Contributions

Donor pledges and commitments at international conferences are typically channeled through inter-governmental funds. Given that the pledging conference itself does not enjoy international personality, the donors must contract with the trustee so the latter can receive, hold, invest, and reimburse the funds to their intended beneficiaries. Although inter-governmental organizations, such as the World Bank, make the vast majority of contributions to states and trustees, treaties do not convey the pertinent transactions. Rather, the two parties tend to situate their contractual relationship within the broader realm of transnational law. As a result, they have shown a preference for flexible instruments such as memoranda of understanding, ad hoc contracts (such as instruments of commitment), simple unilateral acts, and others. Relevant instruments, while facilitating the transformation of a promise/pledge into an asset-based contribution, at the same time relinquish both the donor and trustee from all possible liability.