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Evaluation Bias and Incentive Structures in Bi‐ and Multilateral Aid Agencies

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  • Katharina Michaelowa
  • Axel Borrmann

Abstract

Evaluation is generally considered as an important tool to ensure the effective use of development aid, but it is itself subject to distortions. To derive institutional conditions conducive to effective evaluation, we develop a multi‐level principal‐agent model focusing on the interests of the different actors involved in the evaluation process. The model highlights two central problems: (i) the aid agencies’ conflicting objectives of transparency and self‐legitimization, and (ii) the potential collusion between the evaluator and the project manager. Evidence for the World Bank and different German donor agencies reveals concrete institutional requirements for a reduced evaluation bias and increased transparency.

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  • Katharina Michaelowa & Axel Borrmann, 2006. "Evaluation Bias and Incentive Structures in Bi‐ and Multilateral Aid Agencies," Review of Development Economics, Wiley Blackwell, vol. 10(2), pages 313-329, May.
    • Handle: RePEc:bla:rdevec:v:10:y:2006:i:2:p:313-329
    DOI: 10.1111/j.1467-9361.2006.00320.x
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    1. Vaubel, Roland, 2003. "Principal-Agent-Probleme in Internationalen Organisationen," Discussion Paper Series 26392, Hamburg Institute of International Economics.
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    Cited by:

    1. Osman S Kiratli, 2019. "Aiding together? Europeans’ attitudes on common aid policy," European Union Politics, , vol. 20(2), pages 261-281, June.
    2. Michaelowa, Axel & Michaelowa, Katharina, 2011. "Coding Error or Statistical Embellishment? The Political Economy of Reporting Climate Aid," World Development, Elsevier, vol. 39(11), pages 2010-2020.
    3. Bruno Frey, 2008. "Outside and inside competition for international organizations—from analysis to innovations," The Review of International Organizations, Springer, vol. 3(4), pages 335-350, December.
    4. Elena V McLean, 2015. "A strategic theory of international environmental assistance," Journal of Theoretical Politics, , vol. 27(2), pages 324-347, April.
    5. Christopher Kilby & Katharina Michaelowa, 2019. "What Influences World Bank Project Evaluations?," Springer Books, in: Nabamita Dutta & Claudia R. Williamson (ed.), Lessons on Foreign Aid and Economic Development, chapter 0, pages 109-150, Springer.
    6. Burger, Ronelle & Owens, Trudy, 2010. "Promoting Transparency in the NGO Sector: Examining the Availability and Reliability of Self-Reported Data," World Development, Elsevier, vol. 38(9), pages 1263-1277, September.
    7. Lena Gutheil & Dirk-Jan Koch, 2024. "Aid Unchained: Examining Development Project Management Practices at Aid Chain Interfaces," Progress in Development Studies, , vol. 24(2), pages 97-112, April.
    8. David A. Bell, 2017. "Evaluation Influence: The Evaluation Event and Capital Flow in International Development," Evaluation Review, , vol. 41(6), pages 568-592, December.
    9. Jabeen, Sumera, 2016. "Do we really care about unintended outcomes? An analysis of evaluation theory and practice," Evaluation and Program Planning, Elsevier, vol. 55(C), pages 144-154.
    10. Faust, Jörg, 2008. "Are More Democratic Donor Countries More Development Oriented? Domestic Institutions and External Development Promotion in OECD Countries," World Development, Elsevier, vol. 36(3), pages 383-398, March.

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