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

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  • Mansoob Murshed

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.

Suggested Citation

  • Mansoob Murshed, 2008. "On the Non-Contractual Nature of Donor-Recipient Interaction in Development Assistance," WIDER Working Paper Series RP2008-71, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:rp2008-71
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    File URL: https://www.wider.unu.edu/sites/default/files/rp2008-71.pdf
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    References listed on IDEAS

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    Keywords

    Contracts; Economic assistance and foreign aid;

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