Intermediation by aid agencies

Colin Rowat and Paul Seabright

Industrial Organization from University Library of Munich, Germany

Abstract: This paper models aid agencies as financial intermediaries that do not make a financial return to depositors, since the depositors' concern is to transfer resources to investor-beneficiaries. This leads to a significant problem of verification of the agencies' activities. One solution to this problem is for an agency to employ altruistic workers at below-market wages: workers can monitor the agency's activity more closely than donors, and altruistic workers would not work at below- market rates unless the agency were genuinely transferring resources to beneficiaries. We consider conditions for this solution to be incentive compatible.

Keywords: signalling; non-profit; wage differential; donations; altruism; two-sided market (search for similar items in EconPapers)
JEL-codes: L (search for similar items in EconPapers)
Pages: 26 pages
Date: 2004-12-09
Note: Type of Document - pdf; pages: 26. University of Birmingham, Department of Economics Working Paper, 04-22 (3 November 2004)
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https://econwpa.ub.uni-muenchen.de/econ-wp/io/papers/0412/0412007.pdf (application/pdf)

Related works:
Journal Article: Intermediation by aid agencies (2006)
Working Paper: Intermediation by aid agencies (2005)
Working Paper: Intermediation by Aid Agencies (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpio:0412007

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