Intermediation by Aid Agencies
AbstractThis 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.
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Bibliographic InfoPaper provided by University of Toulouse 1 Capitole in its series Open Access publications from University of Toulouse 1 Capitole with number http://neeo.univ-tlse1.fr/1206/.
Date of creation: Apr 2006
Date of revision:
Publication status: Published in Journal of Development Economics (2006-04) v.79, p.469-491
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Other versions of this item:
- Rowat, Colin & Seabright, Paul, 2004. "Intermediation by Aid Agencies," CEPR Discussion Papers 4781, C.E.P.R. Discussion Papers.
- Colin Rowat and Paul Seabright, 2005. "Intermediation by aid agencies," Discussion Papers 05-16, Department of Economics, University of Birmingham.
- Colin Rowat & Paul Seabright, 2004. "Intermediation by aid agencies," Industrial Organization 0412007, EconWPA.
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs
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