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Strategic Interaction and Donor Policy Determination in a Domestic Setting

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  • Mansoob Murshed

Abstract

This paper examines some of the issues associated with the aid donor process arising from the theory of agency or principal-agent models and endogenous policy determination. The principals may be viewed as legislators and the agents as the aid agency. In addition to adverse selection and moral hazard the paper considers intrinsic sources of motivation for agents and the trade-off between adverse selection and moral hazard. It also considers multiple task agents, and where there are many principals with divergent objectives.

Suggested Citation

  • Mansoob Murshed, 2002. "Strategic Interaction and Donor Policy Determination in a Domestic Setting," WIDER Working Paper Series DP2002-107, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:dp2002-107
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    File URL: https://www.wider.unu.edu/sites/default/files/dp2002-107.pdf
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    References listed on IDEAS

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    5. Kreps,David M. & Wallis,Kenneth F. (ed.), 1997. "Advances in Economics and Econometrics: Theory and Applications," Cambridge Books, Cambridge University Press, number 9780521589833.
    6. Murshed, S Mansoob & Sen, Somnath, 1995. "Aid Conditionality and Military Expenditure Reduction in Developing Countries: Models of Asymmetric Information," Economic Journal, Royal Economic Society, vol. 105(429), pages 498-509, March.
    7. Lahiri, Sajal & Raimondos-Moller, Pascalis, 2000. "Lobbying by Ethnic Groups and Aid Allocation," Economic Journal, Royal Economic Society, vol. 110(462), pages 62-79, March.
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    9. Svensson, Jakob, 2000. "Foreign aid and rent-seeking," Journal of International Economics, Elsevier, vol. 51(2), pages 437-461, August.
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    Cited by:

    1. Shields, Robin & Menashy, Francine, 2019. "The network of bilateral aid to education 2005–2015," International Journal of Educational Development, Elsevier, vol. 64(C), pages 74-80.
    2. Murshed, S. Mansoob, 2004. "Strategic interaction and donor policy determination," International Review of Economics & Finance, Elsevier, vol. 13(3), pages 311-323.

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