On the Non-Contractual Nature of Donor-Recipient Interaction in Development Assistance

Mansoob Murshed

No RP2008-71, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: This paper analyses three issues in strategic donor-recipient interaction motivated by the complexity of the rationale underlying aid. The first is when we have several principals with conflicting objectives. Any one principal cannot offer high powered incentives to the agent to carry out their designated task. The second is to do with the fact that effort associated with ensuring aid effectiveness may concern both principal and agent; the optimal solution to which requires difficult to design cooperative behaviour.

Keywords: Contracts; Economic assistance and foreign aid (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-cta and nep-dev
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