Colleague David Zetland opines on overseas development assistance. You can freely access a copy of his editorial commentary, Save the Poor, Shoot Some Bankers, recently published in Public Choice.
Abstract
Bilateral or multilateral organizations control about 90% of official overseas development assistance (ODA), much of which is wasted. This note traces aid failure to the daisy chain of principal-agent-beneficiary relationships linking rich donors to aid bureaucrats to poor recipients. Waste results when aid middlemen (un)intentionally misdirect ODA. Waste can be reduced by clarifying domestic goals for ODA, using fewer middlemen with greater intrinsic motivation, empowering recipients, and/or replacing bureaucracy with markets.
Keywords Aid - Principal-agent - Asymmetric information - Intrinsic motivation - Public choice
Provocative and worth your time.
"Charity separates the rich from the poor; aid raises the needy and sets him on the same level with the rich." -- Evita Peron
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